Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — LAND AND NATURAL RESOURCES

National Parks Commission

Mr. Wingfield Digby: asked the Minister of Land and Natural Resources how many members of the National Parks Commission have served for two years or more; and how many have practical experience of farming or dealing with questions relating to the land.

The Minister of Land and Natural Resources (Mr. Frederick Willey): Two members have served two years or more. Four have practical experience as farmers or landowners; and two others are experienced in questions of rural land use.

Mr. Digby: Is this not really a rather small proportion of country people, if the countryside is to have confidence in the Commission? Why were such sweeping changes made, in rather doubtful circumstances even of discourtesy, if they were only to put more townsmen in and to turn out countrymen?

Mr. Willey: I can assure the hon. Gentleman that he is wrong about this. No discourtesy was intended and no discourtesy was felt over the representation. On the contrary, this is a very substantial representation on the Commission, which, of course, is smaller than it was previously.

Home-Grown Timber

Mr. Wingfield Digby: asked the Minister of Land and Natural Resources how much public money is being spent

on sales promotion of home-grown timber.

The Parliamentary Secretary to the Ministry of Land and Natural Resources (Mr. Arthur Skeffington): None, Sir.

Mr. Digby: Is it not about time this was done, in view of the enormous public investment—over £100 million—in the woodlands of the Forestry Commission? These trees are coming along in increasing quantities. Should not something be done without further delay?

Mr. Skeffington: My advice is that as far as timber of good quality and at the right price is concerned, there is an adequate market. Difficulties arise in connection with some of the low-grade timber which is produced. This is really very much more a matter of finding additional use, rather than sales promotion.

Commons (Rights of Way)

Mr. Boyd-Carpenter: asked the Minister of Land and Natural Resources if he will introduce legislation to empower himself to prevent conservators and others administering commons from obstructing rights of way to commons.

Mr. Skeffington: No, Sir. So far as I am aware, local authorities who are under statutory duties to assert and protect the rights of the public in these matters are equipped with adequate powers for discharging them.

Mr. Boyd-Carpenter: Would the hon. Gentleman consider the action of the conservators of Putney and Wimbledon Commons? They have erected a gate, which they sometimes lock, across a bridle path leading to the homes of some of my constituents, including one badly disabled lady who can only get about with the aid of a Ministry of Health car. Is the hon. Gentleman aware that they have refused to remove the gate when requested by the local authority? Will he examine the matter to see if he can help, and thereby prevent expensive litigation—paid for by both sides?

Mr. Skeffington: I can assure the right hon. Gentleman that if there is any way we can help in this dispute we will, but the fact is that even in this case—and I have made some inquiries about it,


because I thought this was the case which he world have in mind—the local authority has adequate power. If there is no solution by agreement and we can help, we will.

Land Commission Bill

Mr. Boyd-Carpenter: asked the Minister of Land and Natural Resources what is the date by which he assumed the Land Commission Bill would have received Her Majesty's Assent when he fixed 6th April, 1967, as the first appointed day under that Measure.

Mr. Willey: I assumed that the date would be soon enough to allow full time for the laying of the necessary regulations under the Bill before the first appointed day.

Mr. Boyd-Carpenter: Is the right hon. Gentleman satisfied that professional men and others will have adequate time to study and to understand the immensely complicated provisions of the Bill in the very limited interval which there must be between Royal Assent and his appointed day? Would he not give his Bill a better chance if he postponed the appointed day till the autumn?

Mr. Willey: The right hon. Gentleman will recognise the difficulty of any interim period, but I am fully satisfied that professional bodies will have opportunity fully to understand the Bill.

Mr. Graham Page: Does not the right hon. Gentleman realise he is going to cause chaos by bringing the Bill into operation as soon as this? Would he take the advice of his noble Friend, Lord Silkin, and postpone it to 1st January, 1968?

Mr. Willey: The hon. Gentleman is the last person who should say this, because I understand he has well prepared his commentary on the Bill.

Mr. Kenneth Lewis: asked the Minister of Land and Natural Resources how much extra expenditure will be incurred by his Department on advertising and promotional or information material in 1967 in order to explain the Land Commission proposals to the public.

Mr. Skeffington: About £1,700.

Mr. Lewis: In view of the complications of the Bill, does the Minister think

this is adequate? Since his specialist advisers can hardly understand it, how can the public understand it? It will require enormous expenditure to get this across to the public and to the interested bodies. Would it not be better to drop the Bill than to incur the expenditure of this amount of money?

Mr. Skeffington: The hon. Member will not expect me to answer the purely political points in the latter part of his supplementary question, but I am quite satisfied that the three publications which the Ministry is preparing will be adequate. Indeed, there is very much greater understanding of the Bill than is sometimes suggested.

Mr. Graham Page: Would the hon. Gentleman explain what he means by three publications? One is usually enough. I admit that the Bill is so very complicated that it may require three.

Mr. Skeffington: Perhaps I may remind the hon. Member of the information I gave him about this at an earlier stage. There will be a general leaflet for the public, a leaflet for builders and surveyors and a third one for other practitioners, including solicitors.

Mr. Rossi: asked the Minister of Land and Natural Resources whether he will make a statement about the implications of the proposed postponement from 1st March to 6th April of the first appointed day under the Land Commission Bill on land transactions where the completion date falls between 1st March and 6th April.

Mr. Skeffington: The postponement of the first appointed day will simplify the problems of dealing with the interaction of betterment levy and taxes, as that date is the start of the tax year.

Mr. Rossi: Is not the hon. Gentleman aware that this change of the date will inflict hardship on many parties who have already contracted, on the assurances given by the Government that the appointed day would be 1st March? Purchasers have agreed prices on the basis that they would not have to pay a development levy, which the change in the date will now make them have to pay. Will not the Minister make up his mind and try to do something that will alleviate hardship and not create it?

Mr. Skeffington: The hon. Member will, in fairness, realise that the selection of any date usually disadvantages some, just as the postponement of the date by a few weeks will advantage others. This is inevitable when one chooses a date, but it does not mean that one does not choose one.

Mr. Frank Allaun: asked the Minister of Land and Natural Resources to what extent revenue resulting from the Land Commission Bill will be devoted to compensating local authorities for exorbitant land prices paid by local authorities and thus to reducing council house rents.

Mr. Willey: The yield from the levy is a factor of which general account has been taken in considering the support which the Government is giving to local authorities under various measures. It would be impracticable and inequitable to relate this assistance directly to the levy raised in particular authorities' areas, rather than to the needs and resources of the authorities.

Mr. Allaun: May we take that as an assurance that the Government intend to devote the proceeds of the levy mainly to this purpose and also that this will be additional to the limited subsidy for expensive sites given under the Housing Subsidies Bill?

Mr. Willey: This means that we will implement the assurance which we gave in the White Paper.

Mr. Graham Page: What exactly does the Minister mean by that? Does he mean that the levy goes to the local authorities? That answer leaves us in very much doubt.

Mr. Willey: I remove that doubt at once by saying that a considerable part of the levy will go to aid local authorities.

Morecambe Bay and Solway Firth Barrages

Mr. Hall-Davis: asked the Minister of Land and Natural Resources what conclusions have been reached in the preliminary study relating to a Morecambe Bay Barrage; when the full report will be published; and if he will make a statement.

Mr. Willey: The consulting engineers' reports on their desk studies on barrages across Morecambe Bay and Solway Firth will be published on Thursday, 26th January; and I hope to be able to make a statement very shortly.

Mr. Hall-Davis: Is the Minister aware that there is growing concern in the Morecambe Bay area that certain desirable projects are being delayed by the Government pending the conclusions of the report? Will he consider setting up a project consultative committee on which local authorities could serve and be kept fully informed of progress?

Mr. Willey: I will certainly consider what the hon. Member has said, but he will, I am sure, recognise that we should await publication of the report before making a statement on behalf of the Government.

Mr. Jopling: Can the Minister clarify his original Answer? Will the statement which he has promised be made on Thursday, the day on which the report will be published?

Mr. Willey: I prefer to rest on the words I have used, "very shortly". But "very shortly" indicates "very shortly".

Land Commission (Staff)

Mr. Costain: asked the Minister of Land and Natural Resources whether he is satisfied that 2,000 civil servants of the requisite ability will be available for the staff of the Land Commission by 6th April; and how many will have professional qualifications.

Mr. Skeffington: Recruitment of staff for the Land Commission is proceeding satisfactorily. About 1,800 will be in post by 6th April and this number will be sufficient for the work to be done at that time. Professional work will be undertaken on behalf of the Commission by the Valuation Office of the Inland Revenue.

Mr. Costain: Why has the Minister to rely on the valuation officers of the Treasury? Having brought in this abortion, would it not be better to deal with it in his own Department? Is not this an admission that he cannot get the staff?

Mr. Skeffington: No, I do not think that it would be better to deal with it in


the Department. The whole purpose of this part of the operation has been to use the office which is already experienced in and equipped to do this work. I am sure that on reflection the hon. Member would be the first to criticise us if we duplicated it.

Mr. Graham Page: What are these 1,800 men? Are they qualified men, office boys, typists or what are they if the valuers are not included?

Mr. Skeffington: If the hon. Member cares to put down a Question, I will be glad to answer it.

Oral Answers to Questions — PUBLIC BUILDING AND WORKS

New Government Offices (Residential Property)

Mr. Allason: asked the Minister of Public Building and Works what is his policy with regard to the windows of new Government offices where these will overlook residential property.

The Minister of Public Building and Works (Mr. R. E. Prentice): The policy is to comply with the requirements of planning controls and building regulations. Where offices overlooking residential accommodation unavoidably cause embarrassment, some use of obscured glass can be considered so long as this is not detrimental to working conditions.

Mr. Allason: Has the Minister noticed the latest research into this subject, which shows that it is not very necessary for people to be able to look out of a window of an office except simply to look up to the sky? Will he, therefore, extend his use of obscure glass to ensure that there is decent privacy for residential property alongside new Government offices?

Mr. Prentice: The privacy of people living alongside is exactly the point which we take into account.

Trafalgar Square

Mr. Moonman: asked the Minister of Public Building and Works if he will take steps to exercise stricter control over the use of Trafalgar Square for causes either directly or indirectly racialist in character.

Mr. Prentice: I consider that the existing controls are adequate.

Mr. Moonman: While I recognise the importance of freedom of speech, may I ask my right hon. Friend what inquiries or investigations he makes in the organisation of rallies similar to that which took place in Trafalgar Square on 15th January?

Mr. Prentice: It was not necessary to make any special and detailed inquiries for the rally in question. The purposes were well known and had been publicised. I share the views of all hon. Members on this side that this was a nasty and squalid affair—[Interruption.]—but I am glad that my hon. Friend mentioned the right of free speech. In matters of this sort, clearly one has to allow such a rally to take place.

Mr. Biggs-Davison: Is the Minister aware that this Question is ill-founded, particularly as his hon. Friend said that he believes in free speech, since there is nothing either directly or indirectly racialist about the cause of renewed talks with Rhodesia, which is the cause of the whole of Her Majesty's Opposition?

Mr. Prentice: It is relevant to ask these questions in view of my responsibilities for racially-inspired meetings. It was the Conservative Government which made the decision to ban Fascist organisations following the grave disorders in Trafalgar Square in the summer of 1962. Since then, Fascist organisations have from time to time been banned from holding meetings. This is a relevant question.

Mr. John Lee: Does my right hon. Friend agree, however, that what happened on 15th January, with the permission of his Ministry, was not simply a racialist rally but one which was wholly illegal in that it was designed to aid and comfort a treasonable régime?

Mr. Prentice: The meeting was not illegal in terms of British law. It was a meeting for a deplorable purpose. [HON MEMBERS: "Why?"] It was encouraging an illegal régime abroad. For that reason, I deplore the decision to hold the rally. However, I think that it was right for the Government to permit it to take place.

Mr. Chichester-Clark: Will the Minister consider confining his comments to


his own responsibilities, especially in view of the enormous rise in unemployment in the building industry?

Mr. Prentice: That supplementary question has nothing to do with the Question.

Star Chamber Court (New Building)

Sir Knox Cunningham: asked the Minister of Public Building and Works the cost of the new building in Star Chamber Court for construction and equipping, respectively.

Mr. Channon: asked the Minister of Public Building and Works the cost per square foot of providing additional office space in the Palace of Westminster.

Mr. Prentice: The total cost of constructing the new building in Star Chamber Court was about £230,000—which works out a gross cost per square foot of about £18. Equipping the building cost about £16,000.

Sir Knox Cunningham: While I admit that the building looks attractive even if expensive, may I ask whether the Minister feels that it is really justified to incur such expense at this time?

Mr. Prentice: Yes, Sir, I do. This was the view taken by the Services Committee and by the House as a whole when the decision was made. Inevitably, because of the various restrictions and difficulties involved, building an extension on to the Palace of Westminster is an expensive operation. In terms of the extra accommodation which is provided, however, the extension will be a very great help and I think it will be welcomed by hon. Members generally.

Mr. Channon: Is the Minister aware that most hon. Members, I think, certainly including myself, consider that the work done is of a very high standard indeed, but has he considered, and can he inform the House whether he thinks that there are, other means which are cheaper than this very high cost indeed of providing extra accommodation for hon. Members?

Mr. Prentice: I understand that there would not have been any cheaper means of providing the accommodation in this place. Hon. Members want accommodation close to the Chamber of the House.

I am glad that the hon. Member has mentioned the high standards of the work. It reflects great credit on the architects and other professional people of my Ministry and on the contractors who did this work in time and in very difficult circumstances.

Stone Masonry Industry

Mr. Costain: asked the Minister of Public Building and Works what steps he is taking to ensure that sufficient work is designed by his Department and other Government Departments in natural stone to maintain the skills and competition in the stone masonry industry.

Mr. Prentice: My Department specifies the use of natural stone for public buildings for which it is considered suitable. We have recently asked other Government Departments, and certain non-Governmental bodies, to consider following this practice.

Mr. Costain: Has the Minister's attention been drawn to the unemployment figures for the building industry, which show a 71·5 per cent. increase between November, 1965, and November, 1966, a 185 per cent. increase in the masonry industry, and a 191 per cent. increase among bricklayers? What is his Department doing about getting on with progress?

Mr. Prentice: A good deal of that question is irrelevant to the original one. So far as there is unemployment in the stone industry, I said in my reply that we have been using natural stone in some recent buildings, including the Star Chamber Court scheme, to which reference has already been made. We have asked other Departments to consider doing the same. There are problems of cost and suitability involved, and we cannot give an absolute guarantee to find full capacity for the stone industry.

Industrialised Building

Mr. Chichester-Clark: asked the Minister of Public Building and Works if he will institute discussions with other Departments and the building and allied industries in an endeavour to arrive at a clearer definition of industrialised building.

Mr. Prentice: No, Sir. I consider that the description in the Ministry of


Housing Circular 76 of 1965 is adequate, and is applicable to all types of building.

Mr. Chichester-Clark: In view of the Minister's dependence on two on-site systems for the supply of about 60 per cent. of industrial building, what is he doing to tell those who are operating the system whether they will receive the S.E.T. repayment or not? They ought to know by now and the present situation really is disgraceful.

Mr. Prentice: If the hon. Gentleman wishes to put down a Question about S.E.T., he should do so, and not tack it on to a totally irrelevant question.

Mr. Chichester-Clark: Is the Minister aware that it is impossible to put down Questions on S.E.T. to him? He will find that himself if he consults the Table.

Mr. Prentice: I have answered a number of questions on S.E.T. from the hon. Gentleman and others which have been properly related to the original Question. This Question was about the definition of industrial building.

Mr. Chichester-Clark: On a point of order. Mr. Speaker, may I have a Ruling at some convenient time on whether we can put down Questions on S.E.T. for the Minister to answer?

Mr. Speaker: That is not a question for the Chair, but a matter to be decided between the Member and the Minister.

Oral Answers to Questions — SOCIAL SECURITY

Deserted Wives

Mr. Rose: asked the Minister of Social Security whether she has now completed the inquiries into the position relating to the payment of deserted wives.

The Minister of Social Security (Miss Margaret Herbison): No, Sir. A letter was sent to my hon. Friend on 10th January explaining the present position.

Mr. Rose: Is my right hon. Friend aware of the facility with which husbands can avoid making payments? Is she also aware of the humiliation caused to many deserted wives by the manner in which they have to collect their pay-

ments? Does not my right hon. Friend think that this matter has been going on for far too long, and ought it not to be dealt with urgently?

Miss Herbison: As was explained in the letter to my hon. Friend, at the present time, to save many of these women from what I consider to be the greatest indignity, that of having to go to court to see whether the money is there when a court order has been made, provision has been made for them to get payment like many other people in the country, though the Supplementary Benefits Commission: as far as I am concerned, there is little or no indignity there. There are others whom it is impossible to help in this way. These are the people about whom we are greatly concerned and we are trying to find a solution to the problem.

Mr. Dean: Can the right hon. Lady give an assurance that where the Supplementary Benefits Commission is helping these women who are getting maintenance allowances, publicity is given to the fact that the Commission will handle the maintenance allowances for them, thus ensuring regular payments?

Miss Herbison: Certainly. I think that the number of women who are already receiving payment in this way shows that it is pretty well known throughout the country that this can be done.

Dame Joan Vickers: May I ask the right hon. Lady what efforts her Department makes to trace husbands who desert their wives? It seems that many of them desert their wives, knowing that they will be looked after by her Department.

Miss Herbison: I think that quite a number of men who desert their wives hope that their wives will be looked after by my Department. This is one of the problems to which we have to give great consideration in any further move forward. I assure the hon. Lady that every effort was made by the National Assistance Board, and is now made by the Supplementary Benefits Commission, to trace these men and get them to accept their responsibilities.

Part-time Workers

Mr. Speaker: Dame Irene Ward, whom we are all pleased to see in her place, to ask Question No. 22.

Dame Irene Ward: asked the Minister of Social Security whether she will consider introducing special insurance provisions for part-time workers.

Miss Herbison: Mr. Speaker, I think that you have expressed the pleasure of everyone on this side of the House at seeing the hon. Lady back in her place. I hope that she has fully recovered.
The Answer to the hon. Lady's question is that the position of part-time workers will be considered in the course of the review of social security provisions.

Dame Irene Ward: Mr. Speaker, I thank both you and the right hon. Lady for your kindness.
May I ask the right hon. Lady whether she has seen the document issued by the National Council of Social Service, with all its wide support throughout the country? As this is now a matter of urgency, in view of the variety of thinking in the country, may I ask whether the Minister is having consultations with the appropriate Ministers, such as the Minister of Labour and the Treasury Ministers, with regard to this matter?

Miss Herbison: I have seen the document referred to by the hon. Lady. This whole problem involves many Ministers, and I assure the hon. Lady that consideration is given jointly to such matters.

Family Circumstances (Inquiry)

Mr. Leadbitter: asked the Minister of Social Security what progress has been made with her family circumstances inquiry; and if she will make a statement.

Mr. Holland: asked the Minister of Social Security what is the average number of children in families where the family income is below the minimum standard laid down in the Ministry of Social Security Act, 1966.

Mr. Dean: asked the Minister of Social Security how many families there are whose income is below the minimum standard laid down in the Ministry of Social Security Act, 1966.

Miss Herbison: The detailed results of the inquiry are being studied and a report on them is being prepared for publication, I hope, in May or June next. As my hon. Friend, the Joint Parliamentary Secretary, told the House on 21st December, the

findings suggest that, after allowing for the increased provision now made by the Supplementary Benefits Commission, and adding something on for one-child families, there are probably about 160,000 families, with 500,000 children in them, whose incomes are below the supplementary benefit standard, and cannot be brought up to that standard because the fathers are in full-time work or wage-stopped.

Mr. Leadbitter: I thank my right hon. Friend for that useful information. The House will certainly be pleased to learn of the early date of publication of the report. May I ask whether in addition to the financial, accommodation and working condition considerations of the inquiry, account has been taken of widows with children who need special help, and whether arising from this she is able to advise the Secretary of State for Education and Science on the further provision of nursery schools and nursery school services?

Miss Herbison: The Secretary of State for Education and Science is responsible for the provision of nursery accommodation, but in this whole question, apart from finance, family endowment can cover a very wide field indeed, and all the questions are being considered.

Mr. Holland: Would not the Minister agree that the problem of children in the low-income families can probably better be solved by concentrating such aid as is available on the distressed families and those most in need rather than trying to deal with the problem by an across-the-board system of general increases of, say, family allowances?

Miss Herbison: I have told the House on a number of occasions that we are examining very many ways by which we can help particularly the distressed families.

Mr. Dean: Can the right hon. Lady give an assurance that in giving more help to low-income families, something which I am sure we all want to see, the family man paying Income Tax will not be penalised by a reduction of the Income Tax allowances?

Miss Herbison: I would advise the hon. Gentleman to await whatever report comes from the work which we are doing.

Dr. David Owen: I am sure that my right hon. Friend's personal concern is beyond doubt, but is she aware that many of us are concerned to read newspaper reports of a possible 12 months' delay before there are any increases in family allowances? Is she aware that this is an urgent problem, and we hope that the Government will act, and act speedily?

Miss Herbison: I am sure we are all aware that this is an urgent problem, but I can accept no responsibility for what is reported in the Press.

Mr. Frank Allaun: We welcome my right hon. Friend's objectives, but will she convey to the other Ministers concerned that there would be the strongest possible objection from hon. Members on this side of the House if attempts to pay for them are made by increasing the cost of school meals and milk?

Miss Herbison: I have said that this whole question of family endowment, every aspect of it, has to be examined so that we can find the best way to help those families who are really deprived at the present time.

National Insurance Pensions

Mr. Holland: asked the Minister of Social Security by how much the purchasing power of the weekly rates of National Insurance pension both for a single person and for a married couple have been reduced since March, 1965, by the increase in prices.

The Joint Parliamentary Secretary to the Ministry of Social Security (Mr. Norman Pentland): 6s. 1d. and 9s. 11d. respectively.

Mr. Holland: Will the Parliamentary Secretary tell the House what steps it is proposed to take to improve the purchasing power of the incomes of those pensioners who have no other means of cushioning the effects of inflation?

Mr. Pentland: We have already introduced the supplementary benefit scheme and I can assure the hon. Member that the present value of the pension is well above that of the best rate given by the Opposition when in power.

Mr. Dean: asked the Minister of Social Security what weekly rates of

National Insurance pensions for a single person and a married couple would be required to keep pace with the rise in average male industrial earnings since March, 1965.

Mr. Pentland: I would refer the hon. Member to the reply I gave to the hon. Lady, the Member for Birmingham, Edgbaston (Mrs. Knight), on 28th November last.—[Vol. 737, c. 23–4.]

Mr. Dean: Is the hon. Member aware that that reply clearly shows that the Government are failing to fulfil their election pledge that National Insurance benefits would be linked to average earnings? Can he say what reaction there has been to the strong criticism coming from his academic supporters to the effect that the social programmes of this Government are substantially worse than what the previous Conservative Government achieved in the social services?

Mr. Pentland: I have never seen any criticism at all coming from our academic supporters about the pension. If the pension had been put up in March, 1965, in line with the rise in average earnings between April, 1963, and October, 1964, the rates would have been 75s. 8d. for a single person and 122s. 2d. for a married couple, whereas we increased them to 80s. and 130s. respectively.

Oral Answers to Questions — HOSPITALS

Junior Medical Staff (Conditions of Service)

Dame Irene Ward: asked the Minister of Health, in view of the unsatisfactory condition under which the junior medical staff at the Newcastle General Hospital have been working and the efforts they had to make for proper conditions of service, whether he is satisfied that the position of junior medical staffs in all hospitals is now appropriate to their service; and if he will make a statement.

The Minister of Health (Mr. Kenneth Robinson): Concern about working conditions of junior hospital doctors led me, in August last, to ask all hospital authorities to review these conditions


locally, and I know that considerable improvements have been made. I am at present engaged in a general review with the profession of matters affecting the work of these doctors.

Dame Irene Ward: In view of the difficulty that the junior medical staff at Newcastle General Hospital had to get their conditions put into order, am I to understand from the Minister's reply that within a short time no doctors will be working under the deplorable conditions that those junior medical doctors were asked to work under, and had to fight so hard to get put right? May I have an assurance, please?

Mr. Robinson: I understand that the complaints of the junior medical staff at Newcastle General Hospital have already been met by the creation of three additional posts in the accident and casualty departments. On the wider issue, I would refer the hon. Lady to the negotiations that I am currently conducting with the profession.

Mr. Molloy: I am sure that Members on both sides of House will welcome what my right hon. Friend has said with regard to the thorough examination of the conditions of service of medical staff, but can he say whether the negotiations referred to in his reply cover the conditions of service for trainee nurses and nurses, and will include an examination of their somewhat mean present remuneration?

Mr. Robinson: Without accepting the last part of my hon. Friend's supplementary question, I am concerned about the conditions of all workers in hospitals. The negotiations to which I have referred, however, are limited to medical staff.

Mr. Braine: Can the Minister say whether his current talks with representatives of the medical profession cover the grievances of junior hospital staff in regard to the shortage of consultant posts and excessive hours of work? Is he aware that present dissatisfaction is leading to an inordinate number of young hospital doctors seeking to emigrate? When are these negotiations likely to come to an end?

Mr. Robinson: They will take just as long as they need to take to reach satis-

Factory conclusions. There are no formal terms of reference, but the negotiations will certainly embrace the matters referred to by the hon. Member.

Selective Employment Tax

Mr. Pavitt: asked the Minister of Health how much he has allocated to regional hospital boards to meet rises in the price of fuel due to Selective Employment Tax.

Mr. K. Robinson: I regret that the information is not available separately. Allocations to regional hospital boards for 1966–67 have been increased by about £430,000 to cover the increased fuel tax and the effect of Selective Employment Tax on contracts for goods and services of all kinds.

Mr. Pavitt: Can my right hon. Friend assure the House that this will not be absorbed by making cuts in other forms of hospital expenditure?

Mr. Robinson: Yes, Sir. The purpose of the £500,000 for the whole of Great Britain is to meet the increased costs which hospitals are experiencing as a result of the increased tax and the S.E.T.

Dame Joan Vickers: Will the Minister deal with this problem on a regional basis? Does he realise that in the West Country we have to pay far more for fuel than does any other part of Great Britain? It is essential that the problem should be considered on a regional basis in future.

Mr. Robinson: I think that the hon. Lady will find that the differential costs of fuel are taken into account anyhow—and have been for some time—in determining regional boards' allocations.

Mr. Pavitt: asked the Minister of Health what additional sum he has allocated to the hospital building programme to meet the cost of the Selective Employment Tax.

Mr. K. Robinson: £500,000 in 1966–67 to meet certain identifiable effects of the tax.

Mr. Pavitt: Does that sum cover the tremendous amount of extra work which the departments of the National Health


Service, regional hospital boards and surveyors and architects have had to put in in making fresh adjustments? Will this alter the timetable of building? Can my right hon. Friend say whether the schemes now included in the first quinquennium will still be carried out in that period?

Mr. Robinson: This will not alter the timetable. I am sure that there will be no delay in hospital building as a result of this. It is not easy to be precise about the effect of this tax, because this is only one factor which can affect building, costs. Other measures introduced by the Government should have an offsetting effect.

Mrs. Knight: Can the right hon. Gentleman say whether nearly £1 million will be allocated to meet the Selective Employment Tax, or has he been talking about the same £500,000 twice?

Mr. Robinson: No, Sir; there are two figures of £500,000. One is revenue and the other capital. The great bulk of the revenue figure is to meet the costs not of S.E.T. but of increased fuel tax.

Oral Answers to Questions — MINISTRY OF HEALTH

General Practitioners (Dispensing of Medicines)

Mr. Pym: asked the Minister of Health whether he will ensure that the right of doctors with rural practices to dispense medicines direct to patients will not be affected by any new arrangements he proposes to make.

Mr. K. Robinson: This right exists only in relation to patients living more than a mile from a chemist in rural areas or satisfying the Executive Council that they would have serious difficulty in getting to a chemist, who request their doctors to dispense for them. The intention is that doctors should still be able to dispense medicines for patients who would otherwise have serious difficulty in obtaining them from a chemist because of distance or inadequacy of communications.

Mr. Pym: Does that reply mean that the arrangement for the future will remain exactly as it is now, or is the Minister saying that he will make it

more difficult for some patients in the countryside?

Mr. Robinson: The net result will not make it more difficult for patients living in the countryside. Discussions with representatives of the medical and pharmaceutical professions on the introduction of the changes are currently in progress.

Artificial Limb and Appliance Centres

Mr. Leadbitter: asked the Minister of Health what progress has been made on the plans for the provision of artificial limbs and appliances in the new centres in the United Kingdom.

The Parliamentary Secretary to the Ministry of Health (Mr. Julian Snow): Nine centres have already been relocated in hospital grounds. Five more are planned to be completed within the next two years, one of which will be at Newcastle.

Oral Answers to Questions — HOUSE OF COMMONS

Catering

Mr. Shinwell: asked the Lord President of the Council what was the actual financial loss in the last three years of the Members' dining room, the special functions in private rooms, the Press catering section, the Members' cafeteria, the bar, the Harcourt Room, and the Strangers' dining room and cafeteria, respectively.

Sir Knox Cunningham: asked the Lord President of the Council when he will report to the House on the investigations made by the Select Committee on House of Commons (Services) into the reasons for the losses of the Refreshment Department.

The Lord President of the Council and Leader of the House of Commons (Mr. Richard Crossman): As I have said in answer to Questions on a number of previous occasions, the finances of the Catering Department are at present under urgent review and I think it would be advisable to await the results of this investigation before detailing figures in the way requested. A full statement will be made as soon as possible.

Mr. Shinwell: Is my right hon. Friend aware that I, at the request of interested parties connected with the Catering Department, deferred this Question for nearly two months? Surely on a question of this sort the House is entitled to the information? If we are sustaining losses can we be told what they are for the respective departments?

Mr. Crossman: I fully appreciate what my right hon. Friend feels about this. I am most anxious not to mislead the House. I want to be absolutely sure that when we break the losses up between the various departments we are giving precise figures. At present I cannot do this.

Sir Knox Cunningham: Was not this department paying its way in the early 1960s? Surely the appropriate House Committee must bear some responsibility for these losses today?

Mr. Crossman: I suggest that is quite a different question.

Mr. Rankin: Are we to assume that matters in the Refreshment Department were as serious as the length of the inquiry would seem to indicate? Could my right hon. Friend say at this stage if the numbers on the payroll exceeded the number of workers?

Mr. Crossman: I cannot possibly answer the last part of that question without notice. My hon. Friend should put that question down for answer. As to the first part of his question, I do not want to under-estimate the seriousness of the situation.

Mr. Lubbock: Is the right hon. Gentleman aware that in view of the prices charged by the Refreshment Department and the fact that the department is not subject to many of the normal overheads that an outside restaurant would have to bear, many of us find it difficult to understand how these losses have occurred? Will he say who is responsible for undertaking the review and whether he has thought of bringing in management consultants to look at these finances?

Mr. Crossman: We have thought very seriously of bringing in consultants. In one sense we have done so, from the Treasury. It has looked at the situation from the O. & M. point of view. I do

not want to go any further before the Committee reports as a whole, but I do not want to under-estimate the seriousness of the situation.

Mr. Frank Taylor: asked the Lord President of the Council on how many occasions during 1966 catering in the House of Commons has been carried out by outside organisations instead of by the catering staff; and what reasons exist for this.

Mr. Crossman: None, Sir.

Mr. Taylor: May I ask the Lord President to inquire into the circumstances of the completion of Star Court on 1st December, when I understand a party took place, and when, as I further understand, an outside catering firm came in?

Mr. Crossman: I had guessed that this might possibly be the basis of the Question, but I would claim that one could not say that the party which took place to celebrate the completion of the building occurred in the House of Commons, since the House of Commons had not taken that particular building over at that time.

Sir S. McAdden: asked the Lord President of the Council what consideration has been given to a departure from the manufacturers' recommended prices for the sale of tobacco and spirits to the Members of this House.

Mr. Crossman: None, Sir.

Sir S. McAdden: May I take it that it is so demonstrably clear that the profit margins on these particular commodities are fair and reasonable that this important Committee of the House thinks that they should be maintained, not only for the Kitchen Committee, but for very many retail outlets throughout the country?

Mr. Crossman: All that I said was that we had no idea of carrying out the proposal of the hon. Gentleman, which does not by any means coincide with his second statement.

Mr. Rankin: Since smoking cigarettes is now regarded as a direct consequence of cancer—[Laughter.]—as Euclid said, vice versa—since this House warns Members and others against the practice, why do we sell cigarettes?

Mr. Crossman: Despite the macabre nature of this subject, that is a further question which my hon. Friend should put down for answer.

Library Clerk (Advertisement)

Dame Joan Vickers: asked the Lord President of the Council whether he will give the reason for an advertisement for a Library Clerk for the International. Affairs Desk which stated that the post was open to both men and women, but that preference might be given to men; and whether he will have this notice withdrawn and re-inserted without this qualification before the closing date on 6th February.

Mr. Sydney Silverman: I have been asked to reply.
In 1950 there was only one female in the senior grade and the proportion for the total staff was 14 men to 5 women.
At the present time over half the total Library staff are women, including all the junior Library Clerks. It is therefore desired to recruit a male junior Library Clerk who is more likely to make the Library his permanent career than any of the female staff, all of whom are under 28.

Dame Joan Vickers: May I ask the hon. Gentleman, whether with a view to the efficient manning of the Library, he will consider all future appointments on merit, other than on sex, or is he considering running a marriage bureau in the Library service?

Mr. Silverman: I have every sympathy with the hon. Lady's point of view, but she will appreciate that the position today is a great deal better than it was a few years ago. On the other hand, she will also appreciate that, in view of the Parliamentary experience and special knowledge required in the Library, a hard core of permanent senior staff must be retained.

Members (Cardiovascular Arteriosclerotic Disease)

Dr. David Kerr: asked the Lord President of the Council whether he will institute studies of the incidence of the cardiovascular arteriosclerotic disease among Members of Parliament in order to promote preventive measures against this condition.

Mr. Crossman: I accept the seriousness of the Question and if my hon. Friend wishes to send me evidence in favour of his suggestion I will take advice on it.

Dr. Kerr: While I am grateful to my right hon. Friend for keeping the door open, may I ask whether he is aware that it is nearly two years since the Parliamentary Medical Committee made some observations in connection with this, and more than a year since his predecessor announced to the House that a local practitioner had offered to act as honorary physician to the House? In view of the recent deaths of colleagues on both sides of the House, can he not proceed a little more constructively and quickly on this question?

Mr. Crossman: I have indicated my view that cardiovascular arteriosclerotic disease may possibly be an occupational disease of M.Ps. However, I want to have more evidence of this, through the expert knowledge of my hon. Friend. If he gives me the expert evidence I will take advice upon this.

Sir R. Cary: May I ask the right hon. Gentleman whether it is not a fact that cardiovascular diseases can apply to many other activities in life? Surely there is no need to put Members of Parliament in a special category and frighten the wits out of our families?

Mr. Crossman: Whether we are placed in this special category does not really determine what disease we die from. I merely have my hon. Friend's expert view of this. As I said, if he can provide me with evidence to suggest that the worst is true, despite all that my hon. Friends and I think about it, then let him do it. He has to provide me with reasonable evidence before I take advice.

Royal Assent to Bills (Procedure)

Mr. D. Winnick: asked the Lord President of the Council when legislation will be introduced to change the procedure for the Royal Assent to Bills.

Mr. Crossman: I cannot yet give the precise date. I hope that it will be soon.

Mr. Winnick: In the meantime could not other arrangements be made to stop Black Rod coming along? Would not


the Leader of the House agree that nowadays there is not the slightest justification for House of Commons business to be held up by this farce?

Mr. Crossman: I made my position clear in the debate on procedure. We are now seeking the time for legislation and it will not be long. Then the thing will be over.

Mr. Selwyn Lloyd: Has the right hon. Gentleman considered the very sensible suggestion put forward by the right hon. and Learned Gentleman the Member for the Wirral during the debate?

Mr. Crossman: Yes, I have, and I will consider it. On balance, I want to make assurance doubly sure by this small and non-controversial Bill.

Strangers' Gallery (Morning Sittings)

Sir C. Osborne: asked the Lord President of the Council why he has taken the action of denying the public the ancient right to hear House of Commons debates by closing the public galleries for the morning sessions on Mondays and Wednesdays at 10 a.m. commencing 1st February; and if he will withdraw forthwith his instructions until they have been confirmed by order of the House.

Mr. Winnick: asked the Lord President of the Council what arrangements are in hand for accommodation in the Strangers' Gallery for visitors during the Monday and Wednesday morning sittings.

Mr. Crossman: The Serjeant at Arms made representations to the Select Committee on House of Commons (Services) just before Christmas that, owing to the shortage of Doorkeepers, it would impose an impossibly heavy burden on these men if the full services at present provided in the afternoons were extended to morning sittings. The Doorkeepers are averaging some 60 hours work a week already, and the addition of morning sittings would add some 10 hours extra each week. The Serjeant therefore stated that some of the normal Doorkeepers' posts would have to be given up if the Doorkeepers were to have adequate rest periods off duty.
The Committee considered these representations carefully, and reluctantly came to the conclusion that, owing to short-

age of Doorkeeper staff and the very long hours of duty already worked by the staff, the Strangers' Gallery will not, for the time being, be opened during morning sittings. Until more staff can be recruited alternative arrangements are being made for the public to use the back row of the special galleries during morning sittings. I reckon that as many people will be accommodated in the galleries each morning as are normally to be found listening to our business after 10.30 p.m. The Services Committee consider that this will be adequate, but if it is not, we shall have to reconsider the situation.

Sir C. Osborne: Is not the most reasonable and sensible solution to this problem not to hold morning sittings? In order to accomplish that ought not the Government to stop pushing so much legislation through the Parliamentary machine, such as the Homosexual Bill, which the majority of people in the country do not want?

Mr. Crossman: That is not really to do with the Question that we are seriously discussing. The House has taken a decision about morning sittings and it is the duty of the Services Committee to make arrangements for the public galleries during that period. That is what the Question was about.

Mr. Winnick: Would not the Leader of the House agree that most of the objections from the other side of the House come because hon. Members opposite do not like morning sittings? Does he not further agree that it would be most undesirable if there were any restrictions upstairs while the House is sitting? Would it not be possible for people to make their own arrangements, going upstairs and into the Gallery during the two morning sittings? Would the Leader of the House not agree that this is a further argument for televising our proceedings?

Mr. Crossman: I will not be tempted to reply to the last part of the question. The suggestion in the first part is completely impracticable. Entry to the House has to be controlled. I would say to my hon. Friend that we have calculated, and we had no dissent in the Committee upon this, that for morning sittings we would not get more than the amount


of people upstairs which we have after 10.30 p.m. That is the kind of business that we are doing. If we are right in that calculation, there will be plenty of room for everyone who comes. If we are wrong, then I am sure that I speak for the whole Committee when I say that we shall have to revise the organisation and make room for these people, because the one thing that we will not do is to exclude people from the Gallery.

Mr. Frederic Harris: Does not the Lord President's original reply to the Question emphasise the utter nonsense of meeting on Monday and Wednesday mornings, particular on Monday mornings, when perhaps the only performer will be the hon. Member for Croydon, South (Mr. Winnick)?

Mr. Crossman: I would repeat that we debated at length the pros and cons of morning sittings and we decided to hold them. The job of the Services Committee and the Leader of the House is to accept the decision of the House and to implement it in a way most convenient to the public. That is all that we had to consider when we came to our decision.

Mr. Alfred Morris: Can my right hon. Friend say what consultations he, or his officials, had with representatives of the staff of the House about morning sittings?

Mr. Crossman: My officials consulted at length with the representatives of the staff and I gather that what we had there was most satisfactory to the Doorkeepers.

JUSTICES OF THE PEACE

Sir J. Langford-Holt: asked the Attorney-General in view of the fact that it is now Her Majesty's Government's policy to draw justices of the peace from all sections of the community, if he will now ensure that half the number of justices of the peace shall be women.

The Attorney-General (Sir Elwyn Jones): It is the policy of my noble Friend the Lord Chancellor that justices should be drawn in reasonable numbers from each section of the community. It does not follow that each section must be equally represented.

RACE RELATIONS BOARD

Dr. Gray: asked the Attorney-General whether he has decided to prosecute in the case of the Yarmouth hotel proprietor referred to him by the Race Relations Board.

The Attorney-General: I am considering whether to institute civil proceedings for an injunction in this case. Inquiries which are being made in this connection are nearing completion.

Dr. Gray: Would my right hon. and learned Friend say why he has taken so long to reach a decision in this flagrant case of racial discrimination, concerning a sophisticated hotel proprietor who turned out of his hotel, after the couple had already occupied a room, a man and his wife simply because the man was coloured?

The Attorney-General: As this matter may come before the courts, I do not think it desirable that I should comment upon it, but it is not without difficulty. Inquiries are nearing completion and a decision will be made very shortly.

ZINOVIEV LETTER

Mr. Whitaker: asked the Attorney-General whether he will instruct the Director of Public Prosecutions to take proceedings against those responsible for conspiring to utter the so-called Zinoviev letter in the light of the recent evidence sent to him showing that it was forged.

The Attorney-General: Neither I nor the Director of Public Prosecutions have received such evidence. If any is sent to the Director he will no doubt consider it.

Mr. Whitaker: Alternatively, can the Attorney-General consider the prosecution for false pretences of these officials of the Conservative Central Office, who bought this forgery for £10,000 and have not yet honoured their obligation by paying that money?

The Attorney-General: This again is a matter of alleged history, about which I have no evidence.

Sir J. Hobson: Would not the Attorney-General agree that both this and the previous Question show the same


undesirability of asking him Questions when he has a quasi-judicial function to perform and before he has taken his decision, while recognising that he is responsible when the decision has been taken?

The Attorney-General: Speakers in the House have given cognisance to this Question. I share the view of the right hon. and learned Gentleman that it could result in an undesirable situation developing, but I do not think that I ought to seek to place an impediment when the Chair allows the Question to be put.

DIRECTOR OF PUBLIC PROSECUTIONS (INQUIRIES)

Mr. Alfred Morris: asked the Attorney-General if he will instruct the Director of Public Prosecutions to inquire into an organisation, details of which have been sent to him by the hon. Member for Manchester, Wythenshawe, with a view to prosecution.

The Attorney-General: Police inquiries are being made into the activities of this organisation.

Mr. Morris: I thank my right hon. and learned Friend for that reply. May I assure him that there is deep and continuing concern about the activities of this organisation, particularly at the prospect of its spreading its activities to the City of Manchester.

The Attorney-General: I am aware of the anxiety that exists. Inquiries are now being conducted by the police to see whether any criminal proceedings are called for.

CHAIRMEN OF MAGISTRATES

Sir C. Osborne: asked the Attorney-General in view of the fact that judges are considered fit to continue their work until the age of 75 years, why the Government is insisting that chairmen of magistrates shall retire at 70 years of age.

The Attorney-General: The qualities and experience required of a judge of the High Court are different from those required of a justice of the peace. Moreover, judges are normally appointed at a later age than magistrates. My noble

Friend the Lord Chancellor, is, therefore, satisfied that it would not be appropriate for their retiring ages to be the same. He is, however, keeping this matter under consideration.

Sir C. Osborne: What evidence has the right hon. and learned Gentleman to show that chairmen of magistrates become more senile than judges? Since many chairmen of magistrates are still very active mentally, will he please alter this decision?

The Attorney-General: I do not think that there is any implication of senility in this decision—

Sir C. Osborne: Then why take it?

The Attorney-General: —which was taken by my noble Friend. He announced that he was proposing to reduce the maximum age limit from 75 to 70 in his presidential address to the Magistrates' Association in August of last year, and the Association accepted his decision.

Oral Answers to Questions — MINISTRY OF LABOUR

School-Leavers (Commonwealth Immigrants)

Mr. Marquand: asked the Minister of Labour how many school leavers who are the children of Commonwealth immigrants have been placed by the Youth Employment Service in skilled jobs; and what proportion this figure constitutes of the total number of school leavers in that category.

The Joint Parliamentary Secretary to the Ministry of Labour (Mr. E. Fernyhough): Youth Employment Service statistics do not distinguish between children of Commonwealth immigrants and other school leavers. I would, however, refer my hon. Friend to the speech of my hon. Friend, the then Parliamentary Secretary, on the Motion for the Adjournment, on Thursday, 8th December.—[Vol. 737, c. 1720–26.]

Mr. Marquand: I congratulate my hon. Friend on his first appearance at the Dispatch Box. Does not he agree that the Answer which he has given shows that it really is necessary to acquire statistics about this matter and that if we are seriously to combat the evils of racial discrimination in employment we need


to particularise the statistics much more than we have done up to now?

Mr. Fernyhough: An inquiry carried out by the Youth Employment Service has shown that these immigrant school leavers who wished to obtain apprenticeships and who had obtained the required standards have mostly been able to do so, although this often involved considerable additional work on the part of youth employment officers.

Redundancy Payments Act, 1965

Mr. Rankin: asked the Minister of Labour what study he has made of the memorandum and comments of Mactaggart and Mickel, of Edinburgh, a copy of which has been sent to him, advancing certain conclusions and suggestions for improving the Redundancy Payments Act, 1965; and if he will introduce legislation to amend the Act.

The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): As these proposals, which I have studied with care, run counter to the general purpose of the Act, amending legislation would not be appropriate.

Mr. Rankin: May I offer my good wishes to my hon. Friend on his promotion and wish him well on behalf of the whole House? If he is satisfied with the Answer he has just given and sees no reason for improving the Act, then at least for the time being I am satisfied.

Mr. Edward M. Taylor: Is the hon. Gentleman aware that the memorandum showed up genuine abuse of this generally good Act in particular cases where foremen were offered bribes so that certain people could be sacked and would therefore get redundancy payments? Is he aware of the need to counteract such action and to preserve the whole principle of the Act?

Mr. Hattersley: The shortcoming of the memorandum is the fact that it was based on the belief that redundancy payments were designed to compensate a man for the period of unemployment rather than the understanding that redundancy payment; were intended to help him with his initial problems on losing his job. In any case, there is little evidence to support the main contention in the memo-

randum and there is no evidence to justify its rather paternalistic suggestion for this amendment.

Asbestos Disease

Mrs. Joyce Butler: asked the Minister of Labour if he will arrange for the Inspector of Factories to conduct an investigation into asbestos disease, covering not only workers in asbestos factories but also people engaged in the washing of the clothing of such workers, dockworkers handling asbestos loads, and other people in contact with asbestos.

Mr. Fernyhough: The work needed to provide me with a basis for future action to deal with risks from asbestos is already in hand.

Mrs. Butler: In view of the number of deaths of relatives of asbestos workers and dockers and the contraction of asbestos disease by people living within half a mile of asbestos factories, in addition to the risk involved from the dumping of asbestos waste, will my hon. Friend ensure that the revised regulations take into account all these known and suspected asbestos risks and are not limited to asbestos factory workers?

Mr. Fernyhough: As my hon. Friend is aware, my responsibilities under the Factories Act relate to persons employed, although other persons will benefit indirectly from the increased protection which will be provided by the revised regulations.

Dame Joan Vickers: Does the hon. Gentleman realise that this is a very serious problem indeed? Will he see to it that adequate protection is provided, at least for those who work with or near this commodity, particularly in Her Majesty's Dockyards, where a great many people suffer from the effects of asbestos disease?

Mr. Fernyhough: My right hon. Friend is very well aware of the seriousness of this problem, and that is why the Advisory Committee is now carrying out its investigations.

DAVIES INVESTMENTS

Mr. Winnick (by Private Notice): asked the President of the Board of Trade if he will make a statement on the failure


of the banking firm Davies Investments which has now ceased business.

The President of the Board of Trade (Mr. Douglas Jay): The Board of Trade is urgently investigating the situation, using its powers under Section 18 of the Protection of Depositors Act, 1963.

Mr. Winnick: Would not my right hon. Friend agree that this whole matter needs the most thorough investigation and that a great deal of the activities of this group, which have come to light in the last day or two, certainly smell? What can be done to assist the many small depositors who are in danger of losing their money? Would he investigate the state of properties, spotlighted in a number of daily newspapers today, where obviously Rachman-like conditions have existed for some time?

Mr. Jay: We are investigating this now, and I promise my hon. Friend that this investigation will be thorough. When we have ascertained the facts, we will use such powers as we have and which seem to be necessary. Any question on housing must, of course, be addressed to my right hon. Friend the Minister of Housing and Local Government.

Mr. Barnett: Is it not fantastic that our laws should allow some 5,000 small depositors to have their money at risk while shareholders and directors of this description have only modest sums of their own at risk? Will he consider amending the Companies Bill in another place so to arrange our laws as to prevent this sort of completely ridiculous ratio of risk between the small depositors and the shareholders of a company?

Mr. Jay: We are at present operating under an Act which was passed by the Conservative Government in 1963. However, I think that it would be better, before taking any final decision about amending the law, fully to ascertain the facts in this case.

Mr. Doughty: Would the right hon. Gentleman draw the attention of his right hon. Friend the Home Secretary to the necessity for increasing the strength of the Fraud Squad of Scotland Yard to enable it to make more investigations into the affairs of companies which are suspected of having been carried out not carelessly but fraudulently?

Mr. Jay: I am sure that my right hon. Friend has paid due attention to that suggestion.

Mr. Barber: Does the right hon. Gentleman take the view that he already has sufficient power to deal with a case such as this, and will the provisions of the Companies Bill, when it becomes law, have any bearing on a case like this?

Mr. Jay: The Companies Bill would, as it now stands, not affect this particular type of company, except in so far as it affects all companies. I have powers at present, if I thought it necessary, either to appoint inspectors or to petition for a compulsory winding-up of a company of this kind; but I think that it would be unwise to take a decision until I have ascertained all the facts.

Mr. Shinwell: Has my right hon. Friend taken note of the frequent failure of private insurance and investment companies, which seems to indicate a failure of private enterprise? Will he have a general inquiry made into the subject in order to prevent innocent and unsuspecting people from being defrauded by private interests?

Mr. Jay: That aspect, concerning insurance companies and so on, is another question, but it seems to show that in many cases there is need for Government control over private enterprise. [Interruption.] As my right hon. Friend knows, we are proposing some drastic powers in the matter of insurance in the Companies Bill.

BIRMINGHAM ALUMINIUM CASTINGS (STRIKE)

Mr. Chapman (by Private Notice): asked the Minister of Labour whether he has any statement to make about the strike at Birmingham Aluminium Castings, Smethwick.

The Minister of Labour (Mr. R. J. Gunter): Some 60 maintenance fitters have been on strike at Birmingham Aluminium Castings since 5th January over an outstanding pay question. Stoppage of production at the firm caused 20,000 employees to be laid off in British Motor Corporation plants at the end of last week. If the strike continues, the effects will spread.
I understand that the possibility of a return to work and an inquiry by Mr. Scamp under the auspices of the Motor Industry Joint Labour Council is being explored and that the Transport and General Workers' Union, to which the majority of the employees on strike belong, is still considering its position.
In view of the urgency of the situation, I have invited officers of the Transport and General Workers' Union and of the National Society of Metal Mechanics, whose members are also involved, to meet me this afternoon.

Mr. Chapman: Could not agreement be sought so that Mr. A. J. Scamp is more active and has a more continuing rôle to play in these disputes? Would not this enable him to watch them and hasten a settlement where that is desirable, instead of his having to watch them festering for month after month, as happened in this case, so making a strike in the end absolutely inevitable? Could not Mr. Scamp have this extra rôle to prevent these things from taking place?

Mr. Gunter: I rather imagine that my hon. Friend misunderstands the position. This is not a company entirely inside the motor car industry. To enable him to conduct an inquiry in a firm such as this, Mr. Scamp would require the authority of the management and the unions. Thus, the answer to my hon. Friend's supplementary question is that of course the position has been watched but that, under the existing terms of reference, we have been unable to move.

Sir K. Joseph: Is the right hon. Gentleman saying that Mr. Scamp, or someone acting on his behalf, had requested access to this firm but was refused it during the last few weeks or months by either the management or the unions? Would he say whether this dispute in any way represents a breach of a collective agreement?

Mr. Gunter: The answer to the second part of the right hon. Gentleman's question is that this is an official strike and that all the procedure has been exhausted. The matter has been to York and the failure to agree has been minuted. To answer his first point, when I meet the unions this afternoon the prime purpose of that meeting will be to ascertain

just what are the difficulties—whether they spring from the management or the unions—about allowing Mr. Scamp to intervene.

Sir K. Joseph: The right hon. Gentleman has not answered my question. Had Mr. Scamp or someone on his behalf requested access to this firm during the build-up to the strike and, if so, was that access refused either by the management or by one or other union?

Mr. Gunter: I am not sure what the right hon. Gentleman means when he uses the phrase "build-up". I hope the right hon. Gentleman is not inferring that I or my Ministry should have interfered in any way before 5th January, when this really arose, and when the York meeting stated that there was a failure to agree.

Hon. Members: Answer the question.

Mr. Gunter: If I am permitted to do so, I will. Nobody was asked to intervene when the normal procedures were being carried out. Since 5th January there have been almost daily contacts in an effort to get the matter solved.

Sir K. Joseph: The right hon. Gentleman is aware that since Mr. Scamp's first intervention in this firm the recommendations he made do not seem, certainly to the layman, to have been carried out. Therefore, has Mr. Scamp sought access to the firm since his first report and prior to 5th January, and, if so, have they been refused?

Mr. Gunter: During the period when the procedure was being carried out, as the agreements provide, the answer is "No, he did not"—and rightly so.

Mr. Christopher Price: In view of the fact that many people in the Birmingham area have known that this was one dispute which was boiling up for a very long time before 5th January, is it not time that there were some procedures for Mr. Scamp to enable him to intervene at that sort of stage, even though either the management or union might be unwilling for him to intervene at that stage? In other words, is it not time that we gave Mr. Scamp statutory powers which he does not have at the moment.

Mr. Gunter: There are many statutory powers which I would like to be given, but I have not got them. That


power can be brought in only when the management or unions agree.

Mr. Kenneth Lewis: Quite apart from whether Mr. Scamp should have gone in earlier on this strike, does not the Minister agree that the Ministry ought to have some kind of "fire brigade" powers to go in on any strike at an early stage to prevent it going on and reaching this sort of situation?

Mr. Gunter: I think we should get this situation quite clear. This dispute has been through the whole procedure as defined by national agreement. It culminated in the meeting in York by a decision that there was a failure to agree. It is only at this point that the Ministry of Labour can intervene. It would be an impossible situation if, despite anything that the management said or the unions said, we could take power to interfere on what are the negotiated procedures.

Mr. Biffen: Since the history and details of this strike are well known to the Ministry, can the Minister say here and now if he is to convey his opinion to the union which he is meeting this afternoon that if a settlement were reached on the terms asked by the employees it would breach the criteria for the period of severe restraint?

Mr. Gunter: What I propose to say to the unions this afternoon is that they

come with me either in an inquiry through the Motor Car Council or any other means to find what is in dispute, but, as I made clear to the company busmen and the railwaymen, any settlement arrived at must satisfy the Government's prices and incomes policy.

BILL PRESENTED

FUGITIVE OFFENDERS

Bill to make fresh provision for the return from the United Kingdom to other Commonwealth countries and United Kingdom dependencies of persons accused or convicted of offences in those countries and dependencies; to regulate the treatment of persons accused or convicted of offences in the United Kingdom who are returned from such countries and dependencies; to authorise the making of corresponding provisions for United Kingdom dependencies, including provisions for the return from such dependencies of persons accused or convicted in the Republic of Ireland; and for purposes connected with the matters aforesaid, presented by Mr. Roy Jenkins; supported by Mr. Bowden, Mr. Ross, The Attorney-General, The Solicitor-General, Mr. William Rodgers, and Mr. Dick Taverne; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 172.]

IRON AND STEEL BILL

As amended (in the Standing Committee) farther considered.

Clause 1.—(THE NATIONAL STEEL CORPORATION.)

3.42 p.m.

Mr. Ian Mikardo: I beg to move Amendment No. 131: In page 2, line 5, at the end to insert:
(4) Any person appointed as a full-time member of the Corporation shall not engage in any other remunerated work.
This Amendment is to ensure that persons appointed as full-time members of the Corporation shall be full-time members of the Corporation. It has now become a truism to demand of people a fair day's work for a fair day's pay. That applies to management as well as to men, to directors as well as to everybody else. It applies as much to a fair month's work and a fair year's work for a fair month's pay and fair year's pay.
We had a debate the other day in which we talked about the position of the Board and about whether there should be full-time members or part-time members. No one sought to define what we meant by "full-time" because the term does not seem to require any definition. If full-time means anything at all, it means that a man is devoting all his remunerated working time to the job. Whatever one may think about part-time members or not, it seems impossible for a man to be a full-time member of a board and to do some other part-time job as well.
The people who are to have the job of running this Corporation have a big task in front of them. The Organising Committee, from all that one has heard, is working extremely hard and has discovered a mass of problems which it will have to resolve, and resolve very quickly. A great deal of work has to be put in by this Corporation, certainly in the first two years. Things may be easier afterwards.
The other day the Minister moved an Amendment to raise the maximum size of the Corporation to 20. I dissented from that, and so did some other hon. Members, but my right hon. Friend got his point. The point he was making was that there was an awful lot of work to do and we would need the people who could do it. If there is an awful

lot of work to do, it will not be done if some of those appointed as full-time directors, and paid as full-time directors, are doing other things for part of the time.

3.45 p.m.

There is an Amendment to come on shortly which I would be out of order to deal with in detail—Amendment No. 134: In page 2, line 14, at end insert:
Provided that subsection (9) of the said section I shall have effect as if there were added thereto a further paragraph as follows:—
'(c) shall ensure that any such remuneration allowances or pensions are at a level adequate, in the opinion of the Minister, to attract to membership of the Corporation persons of proven ability and are in any event not less than those paid to or in respect of directors of comparable industrial enterprises'.
I may perhaps be allowed to say in a sentence that when we come to that Amendment we shall be discussing levels of remuneration to be paid to full-time members of the Corporation. I would not dream of trying to anticipate what then will be said, but it is a reasonable guess that some at least will say that these men will need to he paid a lot of money if we are to get the best men.

Whatever one may think of the merits of that, if one asks that they shall be paid a lot of money to be full-time directors of the Corporation, they will not need to earn any money as part-time directors of some other corporation or as part-time employees in some other job. The point here is so self-evident that I think there is no need for me to labour it. If the Minister is not proposing to accept it I shall be more astonished than I have been—and I have been astonished many times in my Membership of this House—since I was elected in 1945.

The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Jeremy Bray): It is certainly the intention of my right hon. Friend that there should be full-time members of the Corporation. The intention of the Amendment is entirely unobjectionable. Certainly my right hon. Friend would accept that anyone appointed to the Corporation should devote his full time to its work.
However, the Amendment is not necessary because it does not add anything


to the powers that the Minister already has under the Bill. Under Section 1(4) of the 1949 Act, which is being revived, members of the Corporation hold their posts under terms of appointment which the Minister lays down. The same sort of terms will apply as apply to the other nationalised industries. These, for example, require that no members of the boards shall, without the Minister's consent, engage in any trade or activity or become a director—[HON. MEMBERS: "Oh."]—yes, I entirely take this point; without the Minister's consent a member may not engage in any trade or activity or become a director or officer of any body corporate.
There is a difference here; the Minister's consent is discretionary. I think my hon. Friend the Member for Poplar (Mr. Mikardo) would agree, whatever he may feel about some particular appointments, that in general the possibility should exist for a member of one nationalised board to be a member of another nationalised board. For example, Sir Giles Guthrie, the Chairman of B.O.A.C., is a member of the board of B.E.A. and Sir Anthony Milward the Chairman of B.E.A., is a member of the board of B.O.A.C., since inevitably there are many questions in which the two airlines have a common boundary of interest.

Mr. Mikardo: That is an excellent example, but is there any reason why the part-time job should be paid for when the member is a representative on the other board of his own corporation for which he is paid?

Dr. Bray: That is a point to which I am about to come. Where it is desirable that there should be cross-membership in this way my right hon. Friend would normally require that the remuneration received by the full-time member of the Corporation in respect of his outside appointment should be paid by him to the Corporation. So the Corporation would save by his being a member of another board, for if the Corporation had on it a part-time member from, say, the Electricity Council it would have to pay for that part-time member's services and the Electricity Council would have its fees reduced by a corresponding amount. There is, therefore, no net remuneration addition to the normal salary of a mem-

ber of a Board on account of outside appointments of this character.
I hope that with this explanation my hon. Friend will recognise that the intention of the Amendment is taken, but that, because of the possible desirability in some cases of having members of the Corporation holding outside appointments to which remuneration may be attached, it would be undesirable to accept the Amendment.

Mr. Mikardo: Does my hon. Friend think that it is sensible in present circumstances, with the Organising Committee at full stretch, as it is, that a full-time member of it, who is therefore putatively going to be a full-time member of the Corporation, has just been reappointed for three years as a part-time member of another Corporation which has nothing to do with steel? How can that make sense?

Dr. Bray: My hon. Friend has spoken of only one person. I know of no one other than Mr. Ron Smith who is in this position. I am sure that the experience gained from serving on the Board of B.O.A.C. has been valuable to Mr. Ron Smith in equipping him in such a way that he is well able to discharge the responsibilities which he has now acquired as a member of the Organising Committee and a member-elect of the National Steel Corporation. His services —and the advantages in widening his experience that he gains from membership of the Board of B.O.A.C.—will not abruptly come to an end now.
If my right hon. Friend the Minister had had any fears at all that Mr. Ron Smith would not be able to give all the time that is required to the management of the National Steel Corporation, accepting that this is effectively full-time work, and if my right hon. Friend was not satisfied that continuing membership of the Board of B.O.A.C. would be a positive advantage to Mr. Ron Smith in his membership of the National Steel Corporation, my right hon. Friend would not have agreed to Mr. Ron Smith's continuing as a member of that Board.
Hon. Members should recognise that the work of the National Steel Corporation, will, if we on this side are to have our way, be an activity which ranges far and wide over the whole field of British industry. We shall be discussing this point. Hon. Members opposite will tell


us of the wide interests of many subsidiary activities of the Corporation. It is therefore highly advantageous that the Corporation should maintain links with other industrial activities. If this is so, the Corporation should maintain links with other nationalised industrial activities.
Although I appreciate my hon. Friend's concern that Mr. Ron Smith and all members of the Corporation and of its present Organising Committee should give their full-time to the work, I cannot agree that, in this case either, the Amendment would serve the Corporation's best interests.

Sir Spencer Summers: I want to register an entirely different view from that expressed by the Parliamentary Secretary as to what it is appropriate to do with a salary received by a part-time member of the Board of the Corporation who happens simultaneously to be a full-time member of another Corporation.
The implication of the Minister's statement that the handing back of the salary would mean that the net expense was not increased is that two members of the Corporation, one of whom is responsible alone for his position on the Corporation, the other of whom has in addition outside responsibilities, should be paid an identical sum because presumably they are paid by the hour and, however many responsibilities a person may have, he cannot justify earning a greater sum than that prescribed, because of the number of hours in the day or the week, or the month, or whatever it may be.
It is wrong to argue that the additional responsibilities a person carries by being put on another Corporation—whether for good reasons or bad reasons is beside the point—do not warrant additional remuneration to him in view of the added responsibilities he carries and in view of the added risk to his reputation if things go wrong. It is not a question of how much a man's time per week is worth. I hope that, whatever may be the outcome of the Amendment, the point of view will be accepted that those with additional responsibilities should have them recognised, because of the risk to their reputation and the added responsibilities they carry.

Mr. Brian O'Malley: I agree with the general tenor of the speech made by my hon. Friend the Parliamentary Secretary, but what worries me is that full-time members of a board might, because of the level of remuneration on that board, or for other reasons, seek to collect a pile of part-time or other directorships outside the steel industry. I hope that the Parliamentary Secretary will assure the House that the Minister would not consent to such a situation and would not allow a full-time member of the Corporation to be picking up part-time directorships elsewhere in industry.

Mr. Albert Booth: My hon. Friend the Parliamentary Secretary advanced two arguments against accepting the Amendment—first, that it is not necessary; and, secondly, that it might militate against one desirable possibility open to the Minister if the Act were left unamended. My hon. Friend's assertion that the Amendment is not necessary because members of the Corporation will work on terms and conditions prescribed by the Minister is an argument for saying that this is a matter to be decided, not by the House, but by the Minister. If we were talking about the first industry to be nationalised, this would be a good argument. However, we have considerable experience of nationalised industries and we have seen a considerable number of appointments to the boards of nationalised industries, both part-time and full time. We are therefore entitled to make a judgment as to what terms of appointment we want for full-time members of the Corporation.
To have a full-time member receiving remuneration for services in any other place would be against the interest of the nationalised industries. There are considerable problems attached to the running of this industry, problems which will almost certainly absorb a considerable amount of the time of those serving on the Board. This is not a point of argument between us. What is a point of argument is whether the Corporation's interests would be served by having some cross-membership of directors of firms, or even members of boards of nationalised industries.
Here the argument for the Amendment is strong because, although it is


undeniable that there are cases where it might be desirable for a member of the Board of the Corporation to serve on other boards, it is of the utmost importance that when a member of the Corporation serves upon another Board he is seen to be, and is, there having as his first concern the interests of the Corporation.
4.0 p.m.
We have argued in Standing Committee and we have decided that it is desirable that the National Steel Corporation shall engage in other things than the narrow field of manufacturing steel, and I was one of those who were very much in support of this concept. It is inevitable, therefore, that people working on the Corporation will be concerned with matters other than the making of steel. They will be concerned, for instance, with how it is to be used in manufacturing certain steel products. Nevertheless, it is reasonable to say that if they are full-time members of the Corporation their first interest must be the Corporation. This must be seen to be the case, and this can only be determined by carrying this Amendment.

Mr. Anthony Barber: We are discussing a very narrow point and I shall be very brief. We have a good deal of work to get through and I hope that I shall set a good example.
I support the Joint Parliamentary Secretary in what he has said. I believe that this Amendment, moved no doubt with the best of good will, is in fact nonsense. What it would mean is that if any member of the Corporation wished, for example, to undertake a broadcast on a subject quite unconnected with steel and to receive payment for so doing, he would be unable to do so. The other day Lord Robens appeared on B.B.C. television and told us about his experience when he was in government. This Amendment would preclude any member of the Corporation from writing an article. If I may give one example, I understand that a member of the present Cabinet is at present actually writing a biography. He has not been prevented from doing that, and I understand that he is still drawing his salary. Therefore, I would go the whole way with the Parliamentary Secretary—

Mr. John Peyton: My right hon. Friend's last two arguments make me very uncertain as to which side he is on.

Mr. Barber: I conclude by saying that if at the end of the day the Parliamentary Secretary finds himself in difficulty with his hon. Friends, I shall support him in the Lobby.

Dr. Bray: With the permission of the House, the right hon. Gentleman has made an astonishing disclosure. As Financial Secretary to the Treasury he was apparently in the practice of accepting fees for broadcasting and for writing Press articles. [HON. MEMBERS: "No."] I stand corrected. There are certainly provisions for enabling freedom of speech to apply even to people who are not able to accept fees for their activities.
My hon. Friend the Member for Rotherham (Mr. O'Malley) was concerned that members of the National Steel Corporation should not have a multitude of directorships. I can assure him that my right hon. Friend has no intention of allowing this to happen.
My hon. Friend the Member for Barrow-in-Furness (Mr. Booth) made the interesting point that, wherever a member of the National Steel Corporation served, he should serve as a representative of the National Steel Corporation and not with any other end in view. This, however, conflicts with the requirement that on any board, including the Board of the National Steel Corporation itself, all members should be there with the sole purpose of securing the best interests of the National Steel Corporation. Therefore, if a member of the Steel Corporation is on some other board he is there to seek the interests of the organisation, but the only reason for putting him there is that the two should harmonise.
We cannot expect people to go from the National Steel Corporation to the board of B.O.A.C. or any other board simply as representatives of the National Steel Corporation. The point of putting them there is that in sharing that responsibility they gain experience which is of advantage to the National Steel Corporation but there is no conflict of interests. If there is a conflict of interest, no cross-membership should be allowed to exist.
I appreciate the offer of help from the right hon. Member for Altrincham and Sale (Mr. Barber). I think that possibly some of the considerations in his mind were different from ours. Nevertheless, I hope that my hon. Friend will not put us in the position of having to accept such unseemly offers.

Mr. John Lee: I am afraid that I find the Joint Parliamentary Secretary's explanation somewhat unsatisfactory. It may be that so far as he and the Minister are concerned the requisite conditions will be laid down under Section 149 of the previous Act, but he cannot give us any guarantee about the behaviour of any successive Ministers. We do not know whether a Minister who may take his place, who is not so concerned with the interests of the steel industry as he is, would be prepared to relax the rule and enable people to take up occupations which might be in conflict with their real job on the National Steel Corporation.
It is one thing to say that it is all right for a member of the board to serve on the board of another nationalised industry. One can see that this could be of value to both the organisations of which such a person was a member, as well as being of benefit to himself in enabling him to widen and enrich his experience. But the same thing cannot be said in the case in which he might be given permission to join the board of a private enterprise organisation. I recall that a prominent member of the board of B.O.A.C. was permitted some time ago to be a member of one of the charter companies. This brought the possiblity of conflict between his interests and his duty as a member of the statutory Corporation on the one hand, and his interests as a private business man on the other. I am not suggesting that the individual concerned behaved with impropriety, but obviously it was a continuing source of embarrassment to the man himself and to both the organisations of which he was a member.
My second argument is to repeat what my hon. Friend the Member for Poplar (Mr. Mikardo) said, namely that a full-time member is a full-time member. The Minister will have power to appoint part-time members, and if he really thinks it is desirable for interlocking membership, this should be restricted to those who are described as part-time members. The

only other effect will be to create a very bad impression if people are allowed to collect part-time occupations and part-time remuneration.
I hope my hon. Friend will reconsider his attitude to the Amendment.

Amendment negatived.

The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson): I beg to move Amendment No. 8, in page 2, line 8, at the end insert:
'() As soon as possible after appointing a person to be a member of the Corporation the Minister shall lay before each House of Parliament a statement of the term for which he has been appointed.'
This Amendment has the self-evident effect of requiring the Minister to lay before Parliament the terms of the appointment of members of the Corporation. It is already the case that the White Paper published each November contains a list of members of the public boards of a commercial character, but an undertaking was given in Committee by my right hon. Friend to put down an Amendment to meet a request made by the hon. Member for Bournemouth, West (Sir J. Eden) that publication of the terms of appointment of the Chairman should be explicitly required by the Bill. The Minister said that he would undertake to consider before Report the possibility of a Government Amendment making the publication of the period of office of the Chairman and other members of the Corporation a statutory requirement.
The present Amendment goes somewhat further than the Opposition request, in that there will be publication not only of the terms of office of the Chairman but of other members of the Corporation. I do not think I need labour the point any further. I am sure the Amendment will be supported.

Amendment agreed to.

Mr. Freeson: I beg to move Amendment No. 10, in page 2, line 14, at the end to insert:
'and the members thereof'.
I hope to be as brief on this Amendment as I was on the last. This is a drafting Amendment. Subsection (5) of Clause 1 as drafted revives certain provisions of Section 1 of and Schedule 1 to the 1949 Act. It provides that it
shall have effect with respect to the Corporation and the members thereof as they had


effect with respect to the body established by that Act by the name of the Iron and Steel Corporation of Great Britain.
If that applies to the new Corporation and the members thereof, it should also be stated to have applied to the 1949 Act Corporation and the members thereof.

Amendment agreed to.

Mr. Nicholas Ridley: I beg to move Amendment No. 134, in page 2, line 14, at the end to insert:
Provided that subsection (9) of the said section 1 shall have effect as if there were added thereto a further paragraph as follows:—
'(c) shall ensure that any such remuneration allowances or pensions are at a level adequate, in the opinion of the Minister, to attract to membership of the Corporation persons of proven ability and are in any event not less than those paid to or in respect of directors of comparable industrial enterprises'.

Mr. Speaker: With Amendment No. 134 we are taking, as the House knows, Amendment No. 133 in Schedule 4, page 50, line 21, at the end to insert:
(c) shall ensure that any such remuneration allowances or pensions are at a level adequate, in the opinion of the Minister, to attract to membership of the Corporation persons of proven ability and are in any event not less those paid to or in respect of directors of comparable industrial enterprises.

Mr. Ridley: Amendment No. 134 deals with the level of salaries for full board members. In view of the previous debate which the Parliamentary Secretary to the Ministry of Technology wound up with such impeccable capitalist sentiments, I emphasise that this Amendment applies to full-time board members only. Arrangements made for part-time members will be different, and will naturally follow.
This is a very important point and one to which we on this side of the House attach great significance. The salaries of the members of the Corporation should be comparable with those for similar jobs in private industry throughout the country, and, indeed, throughout the world, because competition for people of this calibre is international and not only national.
It is important that this should be so because the vital task—and here for a

time I am trying to be non-political—which faces this country is to get the nationalised industries and private industry on all fours together, so that there is no discrimination, no difference in morale, no difference in outlook. If we must have nationalisation—and nobody should say that I am in favour of it—we must make it a professional enterprise which can compete, attract and be as efficient as any other in the country. We have talked about the financial disciplines necessary, the conditions of work, the toughness, and so on, but it is vital that salaries, all the way down the scale, should be the same as for comparable positions in order to take another step towards achieving this objective.
No one would suggest that the wages paid to men in the steel industry should be less than those paid to men in private industry. He would be a brave man indeed who suggested that salaries paid to junior management clerks and other middle staff should in any way differ from equivalent salaries paid to similar people in other private industry.

Mr. John Lee: Are not there two ways of doing this? One is to raise the salaries in nationalised industry so that those at the top executive level are comparable with their commercial counterparts; but is not the other to depress those of private enterprise down to the level of nationalised industry?

Mr. Ridley: I will deal with that point at some length, because it is an important one and one which needs to be answered. I preface my answer by saying that it is the first of the arguments which the Minister relied upon in Committee when dealing with similar points.
The Minister used two arguments. First, he used what I call, for the sake of nomenclature, the hierarchical argument, and second, the argument that some of the salaries in private industry were "absurdly high".
To take the hierarchical argument first, he said that there was no evidence that the people in the A.E.A. and C.E.G.B. were not as good as their counterparts elsewhere and there was evidence that, despite having a rather low top ceiling for management in these two industries, they were able to recruit staff. It was contended on this side in Committee that if the top salaries were too low we would


not be able to recruit staff because the differentials would not be there all the way down the scale.
The Minister's argument does not stand up very well. When we get to the income level of several thousand £s a year, an extra £1,000 a year would probably produce only about £100 a year in net earning power. The higher we go—and with the Steel Corporation we have to go right to the very top—the differentials are worth less as each slice of income is given. If we are discussing incomes below £2,000, a rise of £100 a year is worth not far short of £100 a year, but a rise of £100 a year on an income of £10,000 a year is probably worth only £10 or £20 to the recipient.
With our ridiculous and out-dated system of Surtax, we have to pay much greater differentials to achieve the sort of differences which we need. Secondly, I do not think that the A.E.A. and the C.E.G.B. are the only examples to which we should look. It cannot be said that in British Railways, the docks and the Coal Board the standard of technical salaries and managerial salaries at the top level are all that high. The Minister was making some special pleading when he instanced those two industries alone.
4.15 p.m.
In recent years we have had the brain drain. It would be out of order to go into this at any length, but we must design salaries throughout the Steel Corporation so that there will be no brain drain applying to the coming young men, the managers, and the coming technologists in that industry.
On the second argument, that some private industries pay "absurdly high" salaries—I quote from column 394 of the Minister's speech—the truth of the matter is that, be those salaries absurdly high or not, those are the salaries with which the Steel Corporation will have to compete. If it does not pay high salaries, it will lose those men to the "absurdly high" private industry salaries.
Further to that, as I said earlier, competition is really international. At the level of chairmen of Steel Corporations, Coal Boards or Air lines we could well find people being taken abroad by a better offer, and I would very much like to see this country occasionally attracting

men of higher calibre from America or Europe by offering a better salary than they are offering. Let us pick some of their brains and reverse the brain drain.
For all these reasons, I am quote certain that the Minister's argument that the salaries are often absurdly high is one, whatever he may personally think, or whatever his personal prejudice may be, that we cannot hold.

Mr. Ted Leadbitter: The point which the hon. Gentleman is now developing is of special interest. I have listened with great care to what I believe to be a reasoned argument, albeit that I cannot accept the conclusions at which the hon. Gentleman arrives. Will he now define the Amendment? I should like to know at some point what he means by "adequate". I fail to see—

Mr. Speaker: Order. The hon. Gentleman will have an opportunity to make a speech later. He must make his intervention brief at this stage.

Mr. Leadbitter: Can the hon. Gentleman tell us what he means by adequate? Bearing in mind his final remarks about the brain drain, is he thinking of varying the range of allowances on the market—

Mr. Speaker: Order. This is becoming a speech. Interventions must be brief.

Mr. Ridley: The question is whether that intervention was adequately long. It seemed to me to ask so many questions that it would be preferable for me to proceed with what I have to say, and let the hon. Gentleman make his own speech if he is fortunate enough to catch your eye, Mr. Speaker.
In Committee, my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) pressed the Minister about what he, the Minister, thought would be the right bracket of salaries. He reminded him that in the steel industry at present the salary range for executive directors is between £10,000 and £25,000 a year, and he asked whether he would consider £25,000 a year as the sort of salary which the Chairman himself should receive. The Minister dodged this. He gave no answer which committed him but said that he would prefer


to remain impartial at this stage. My hon. Friend then went on—this is in part an answer to the hon. Member for The Hartlepools (Mr. Leadbitter) who interrupted me, but is now not listening to what I have to say—

Mr. Leadbitter: On a point of order, Mr. Speaker. I was listening with great care. I am surprised that the hon. Gentleman has not answered my question.

Mr. Ridley: If I may now proceed, my hon. Friend referred to the salaries known to be paid in private industry. If the Amendment means anything, it means that salaries comparable with those being paid in private industry are what we should pay here. For instance, the average remuneration of working directors of I.C.I. is £32,000 a year. In 27 out of 34 companies picked at random from the private and public sectors, the chairman receives £15,000 or more.
When we consider that in the nationalised industries salaries are in the range of £10,000 to £12,000 for chairmen and vice-chairmen, we see that, in round terms, the gross salaries would have to be doubled, or slightly more, to achieve comparability with private industry. That gives the hon. Gentleman his answer.

Mr. O'Malley: The hon. Gentleman mentioned a number of chairmen of companies who were receiving £15,000 or more. Can he say how much more, and how many of them received how much more?

Mr. Ridley: I do not want to prolong the argument. I cannot give every salary —I have not got them with me—but I have made the point that, if such people in industries of comparable size in the private sector are receiving anything between £15,000 and £30,000 a year, it seems that the nationalised industries pay about half that level to their equivalent people.
The Minister said that it would be the
Government's intention to look at all these arguments in the field of fixing salaries."—[OFFICIAL REPORT,Standing Committee D, 10th November, 1966; c. 394.]
and with that he passed on. We now know why. The Sunday Express told us yesterday why the right hon. Gentleman was disinclined to give us an answer on

this vital question of what salaries would be paid. This is what it said:
A bitter row is developing among Mr. Wilson's advisers over the future of the steel industry.
I take it that the Minister is not one of Mr. Wilson's advisers and it is going on above his head. Should the salaries, asked the Sunday Express, be in the £18,000 to £30,000 range which such men are receiving now?
But the Treasury, backed by Mr. Michael Stewart, the Economic Minister, is determined that there must be no pay packets in this £400-a-week range. They want to keep to the pattern established for the other nationalised industries, which means that full-time members of the Corporation would receive between £7,000 and £9,500.
Then, worst of all,
To arguments that such a low scale of pay would hold up recruitment to the Steel Corporation the Treasury has put forward the names of retired diplomats and overseas civil servants—some with industrial experience —who would willingly accept membership at this rate of pay.
I bet they would. I have no doubt that that would be so. One wonders quite what the First Secretary of State's view is. The Sunday Express tells us:
… there is also Mr. Stewart's view that men of ability should not put reward above everything else.
If that is the view of the First Secretary of State, one is entitled to a little explanation as to why men of ability like the right hon. Member for Newton (Mr. Lee) and the right hon. Member for Middlesbrough, East (Mr. Bottomley) should continue to put reward above everything else when their positions are not quite so important.

Mr. J. J. Mendelson: The hon. Gentleman is spoiling a serious argument.

Mr. Ridley: I thought that hon. Members would not like that. But, if we are to have arguments from that side that people should be paid less for the rate of the job, hon. Members might well remember that it can apply to members of Governments as well as to members of public corporations.
The noble Lord, Lord Melchett, receives £16,000 a year under his present agreement as chairman of the Organising Committee. No doubt, this is a serious drop for him from what he was earning


before. I do not know, but I imagine that he has dropped to this level because he would like to accept the offer made by the Minister.

Mr. Joel Barnett: The hon. Gentleman speaks of a serious drop. A little earlier he spoke about 2s. in the £ being left as true earnings after tax. He is now turning the argument pretty well upside down.

Mr. Ridley: I accept that, and I am glad to have the hon. Gentleman point out that a drop of £10,000 at this level is probably worth not very much net. Nevertheless, it is a sacrifice in expectation. It is right that he should make it if he feels inclined. The noble Lord wants to help hon. and right hon. Members out in their dilemma as to what to do with this industry now they have got it, and I do not want to stand in his way. I only pay tribute to the willing way in which he has come to their aid when they have no clue as to what to do with the nationalised steel industry.
But the point is this. Why should Lord Melchett or anyone else have to take a drop? Why should anyone be asked to come into a great enterprise like the British steel industry and be told, "We understand you are willing to take a drop of £10,000 gross—£2,000 net, or whatever it may be—but we think that it is your duty to do so"? We shall not get the best people in every case, or in many cases, if we do that.

Sir Tatton Brinton: Perhaps my hon. Friend will add that gross salary has a far greater effect on final pension than it does on direct spendable income. A very high salary may carry with it a proportion of pension in the future which is well worth having.

Mr. Ridley: My hon. Friend is absolutely right. I did not wish to go into all the detail, which would, perhaps, be more suitable to a taxation debate.

Mr. John H. Osborn: I was about to make the same point. I need trouble my hon. Friend no further.

Mr. Ridley: My hon. Friend reinforces the argument.
We have reached a stage now when United States executives who are sent over to run American subsidiaries in this country are paid their salaries in America and draw an allowance for living in this country. They will not come here and work at our high tax rates on the sort of salaries which they ought to draw because it is not worth their while. While hon. and right hon. Members opposite continue not only to support these high rates of tax but to cook up ways of making them higher—the child allowances are now in their minds—we shall not find people of the calibre to run this enormously complicated, important and large organisation. If the Amendment is not accepted, the whole of what the hon. Member for Penistone (Mr. Mendelson) calls this exciting adventure will be put at peril.
Hon. and right hon. Members opposite have put themselves in a dilemma in their desire to pull down the better off and their desire to make nationalisation work. In their appalling dilemma, they should support this Amendment. Thousands of people derive their living and prosperity from the steel industry. By pulling down salaries in some sort of discriminatory incomes policy against directors of nationalised industries, they will do nothing but harm to this vital industry. We are here trying to help.

4.30 p.m.

Mr. O'Malley: I am sorry that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) dealt with a serious subject in the way he did. He made a number of unnecessary party points, and the emphasis of his speech seemed to me to be to look at the interests of present directors and to say how terrible it is that people should have to jog along on £16,000 a year rather than a much larger sum.
However, this is a serious subject and both on Second Reading and in Committee I made it plain that I did not want to see some types of people on the Corporation, particularly those who were on the record over the years as being implacably opposed to the public ownership of the industry. I shall add another category of people whom I do not want to see running the industry: I certainly do not want to see retired


diplomats and overseas civil servants appointed to a board of this kind. I should be amazed if my right hon. Friend the Minister did any such thing, because I have far too high a regard for his common sense and deep interest and care for the welfare of the industry to believe for a moment that he would do that kind of thing.
Some parts of what I have to say support some parts of the Amendment, although I could not accept and support it as a whole, particularly because of the last two lines, stating that salaries should be
… in any event not less than those paid to or in respect of directors of comparable industrial enterprises".
My right hon. Friend the Minister pointed out in Committee the enormous difficulties of estimating what comparable salaries are. I think that he mentioned, for example, that in the 14 steel companies the salary range was from £10,000 to 25,000. Does one take the top level or the bottom level, or hit a figure in between? Hon. Members opposite will recognise that there is a difficulty here.
At the same time I wish to comment on the intervention of my hon. Friend the Member for Reading (Mr. John Lee) who is no longer present. I agree with him—I think that there would be common agreement on this side of the House —that some directors and chairmen in British industry receive absurdly high salaries which are more than any one man is worth. But if he wants to get the depression of private enterprise salaries of which he talked, let us not have it at the cost of the efficiency of the steel industry, from which so many of our constituents make their living.
I believe that if we are to attract the best people to run the industry, to accept places on the National Steel Corporation, we must pay the rate for the job. The Minister must be able to offer enough money, so that his choice is not limited to the extent that he cannot get the best people for the job. That is not to say that I believe that in appointing members of the Corporation my right hon. Friend should be allowed to offer some of the absurdly high figures paid in British industry at the moment. But if he is put into a situation, for whatever reason, where he must go on

to the market to try to get members of the Corporation and can offer only the rates of remuneration paid on the boards of existing nationalised industries, he will run into a great deal of trouble, and so will the British steel industry.
From the bottom to the top of the industry I want to see a ladder of promotion by which a man who goes in on the shop floor can reach the board within his working lifetime. There is the possibility of the industry being organised under the Corporation on a regional or product basis—I believe that a regional basis is the best way. We shall, perhaps, have four or five regions and shall need chairmen for them, men who are skilled in the knowledge of the production and sale of bulk steel.
Let us look at the existing salaries, not of the chairmen of companies but the managers of the large steel plants. I do not have a lot of information on the kind of salaries they receive at present, but I have a little, and no doubt my right hon. Friend has more. In view of the range of responsibilities of the person in charge of a region covering a large amount of steel production in a year, and bearing in mind the present level of salaries—not directors' fees, these could obviously be in the absurd position in which the director of a region could well receive twice as much money as the Corporation members.
I do not believe that that would encourage the best people in the industry to try to work their way up and to believe that there was a ladder from the region to the board. In the interests of a ladder of promotion and of salaries at the bottom rather than at the top, the Minister must be free to pay the rate for the job. I do not pretend to know what that rate should be, because I have not been able to get enough information. The Minister certainly should not, on moral grounds, offer salaries which are monstrously high. On the other hand, we shall not get the people we need, and be able to have the promotion ladder we need, if he is tied to the kind of salaries at present paid to the members of the boards of the existing nationalised industries. I hope that when he replies my right hon. Friend will say something about that.
A short time ago my hon. Friend the Member for Poplar (Mr. Mikardo) spoke


on an Amendment which had the purpose of preventing full-time members of the Board from having remunerative work outside. I was particularly interested in the question of the number of directorships outside, and I supported the ideas underlying my hon. Friend's Amendment. If the Minister is able to offer members of the Corporation a salary adequate to attract them to become members, there will not be the pressures on him to allow them to take those outside directorships, which I do not want to see them taking.
If, as a result of nationalisation of a large sector of the steel industry the top salaries are to be paid on the level of those of existing nationalised boards, we shall probably have a large movement from the public into the private sector of the industry and into other parts of industry generally. Personally, there are some people in senior positions of the steel industry, on the boards of directors, whose departure I would welcome. I do not want anything to do with them. At the same time, there are people in senior managerial posts with great skill and energy and a high standard of efficiency and it is these who make the steel of this country and who I want to see kept within the public sector.
There are probably over 200 directors on the boards of companies which will be taken into public ownership. Although I wish to see high salary levels for members of the new board, I hope that the total bill for people at this level will be less than it is at the moment because we certainly do not need 200 to 250 directors. I envisage probably 20 members of the Corporation, including part-timers, with four regions, each having some kind of functional board. This would, I suggest, represent 60 or 70 directors, perhaps even fewer.
In looking at the total salary bill for people at this level, we should bear in mind that there will be a large reduction in the number of directors receiving money. I hope that there will be ruthless pruning so that only those remain in directorial positions who are doing a full-time functional job.
We must also consider the question of how paying the rate for the job in this case fits in with the Government's prices and incomes policy. I have heard it

suggested that, if one does pay the rate for the job, this will transgress that policy. I do not accept that, and I speak as a supporter in principle of the policy. There are two reasons for suggesting that high salaries will not transgress the policy. First, these will be new jobs and, secondly, the total salary bill at this level will come down because the number of directors running the industry will be reduced.
I believe that some of the very high salaries that apparently are paid in the industry at the moment should no longer be paid. One does not want to be absurd about this. At the same time, it would be wrong and unhelpful to be reducing the kind of salaries one wants to pay. I do not want absurdly high salaries. I want to pay the rate for the job. This should not involve any decrease in the remuneration received by the type of man we wish to retain.
It may be argued that the difference, for example, between the salary of a managing director, perhaps £13,000 to £15,000 a year, and the incomes of some one working on the shop floor is too large. I cannot argue on that at the moment. It is another question. What we have to ensure is a salary structure for those doing a useful job and therefore we cannot suddenly tell a person receiving £10,000 a year in a managerial capacity, "Your salary has to be reduced drastically because the salary of full-time members of the board itself is £7,500". Such a course would not contravene the prices and incomes policy and we must face this problem.
I am prepared to go to my constituency and defend the statements I have made on Second Reading, in Standing Committee and again today on this issue. The Minister must pay the rate for the job and that rate does not happen to be a rate that is paid on the existing boards of nationalised industries. I hope that my right hon. Friend will be able to say something about the principle on which he is proposing to act even if he cannot tell us anything definite at the moment. More than one newspaper has suggested that a battle is going on between certain of the Government's advisers about the salaries that should be paid, and I hope that my right hon. Friend will go to the Treasury or whoever is concerned and say that, as ardent nationalisers of the steel industry, we believe that the


jobs in it should go to the best men and that therefore we must pay the proper salaries to get them.

4.45 p.m.

Colonel C. G. Lancaster: In seeking to take part in this debate one is conscious of the discussions which have been so effectively conducted by my right hon. and hon. Friends on this issue in Standing Committee, but I want to take part because, as a member of the Select Committee on Nationalised Industries, I have listened to evidence about every one of the nationalised corporations and in the process have had to have regard to their composition and, in some small way, to payment of members of the corporations. I have never been very happy about either composition or payment, which have resulted in all sorts of anomalies and created circumstances which have made the work of these industries more difficult.
One cannot discuss salaries without having regard both to the composition of these boards and, indeed, the numbers of men expected to act on them. When the hon. Member for Poplar (Mr. Mikardo) intervened the other evening, I found myself much in favour of what he was saying in asking for a smaller corporation. He argued against the advice being tendered, and he made a very sound case. This is relevant because, obviously, a smaller board means that one can have a lesser sum total of remuneration than in the case of a larger board. The right hon. Gentleman, who has left the Chamber at a rather inopportune moment, was arguing that it was necessary to have a board of 20 with all members, with the exception of one or two part timers, being "functional members".
I have never quite understood what "functional" means in this sense. I assume the right hon. Gentleman means someone representing his particular expertise in the industry as a member of the board. But it is right to point out that expertise can be obtained at board level—can be called for and listened to. The idea that someone who is a good functionary makes a good board member is very often absurd.
Quite a number of functional men are not anxious to come to London, or wherever the centre may be, to serve on the board. Thus, a man may either carry out

a job for which he is not necessarily well fitted and is not particularly happy to occupy—with the industry losing in certain aspects through the loss of some of his production or managerial skill—or a rather less good functionary is put on the board, which means that the lesser man will have authority over the greater. So the idea of a functional membership is not necessarily a very sound one.
I mention this because it is the question of numbers with which I am concerned. I should like to see a smaller board, but well paid. I am not being dogmatic about what the payment should be. All I can say is that, reviewing the payment of members of the boards of nationalised industries, I have not considered that the chairmen of the boards or their members have been adequately paid, and this has had its effect on the lower levels in those industries, because there must be some differentiation, some demarcation, between the higher and the lower. I am not anxious to see very high remuneration. It has been rightly said that in practice it does not represent a great deal. I presume that it is a matter of prestige value. It may have some value in relation to the pensions of the people who receive those very high salaries. However, an adequate salary must be paid—say, for the chairman, £15,000 to £25,000, and the salaries of the other board members relative to that. That, I think, would be wise, but even those salaries will be sensible only if the sizes of the boards, either of the Corporation itself or at group level, are themselves not unreasonable.
Of course, one must recognise that the chairmen of these groups or regions—I do not know what they will be called—are going to be very important men. They are going to have responsibility for an undertaking valued, I presume, at the order of £200 million or £250 million, with all that that represents. They, rightly, of course, should have salaries which have regard to those paid to men similarly placed in other industries. Whether they are private enterprise industries or not is neither here nor there. They should have salaries of that level. Quite obviously, they cannot have higher salaries, presumably, than the men on the Corporation.
I was not quite clear from what the Minister said whether he was going to


have those group chairmen on his Corporation. He was not very clear about that. I listened very attentively, but I could not make out his view on that. If he does not intend to have these four or five members on his Corporation board he will have to recognise that unless he pays his group chairmen adequately he will have a very peculiar situation; he may find that he has to pay those group chairmen more than his board members, which in itself is not a very sensible thing to do.
So generally what I am suggesting to the Parliamentary Secretary in the absence of his Minister is that I hope that the Minister will keep an open mind on this matter. I hope that he has not finally decided he is going to have bigger boards. I hope he will not be influenced by what has hitherto happened in the nationalised sector because, as I have said, I have never been happy about the salaries paid to the chairmen or, in many cases, to the other members of the boards. Nor, indeed, have I been happy about the composition of those boards. I think the only thing which merits a man being put on any board is his ability to take part in that board's work in such an effective way that he will improve the board's consideration and decisions and policy. The mere fact that a man is good at his job at a certain level does not make him into a board member; the mere fact that a man has served many years in an undertaking does not make him a good board member.
The important thing is that the Minister should have the best men he can obtain working on his board whether as part-time members, of whom, I think, there should be two or three, or as full-time members. He can obtain all the expertise he wants; if he wants it he can send for it. He should set out to get the best dozen or 15 men he can find, but not have regard to what has hitherto happened in the nationalised sector, for it has not been altogether healthy. Here he has an opportunity now to do something sensible in recruiting his board for this new nationalised undertaking by getting men of high quality, and he can do that only if he pays adequate salaries—not absurdly high salaries, but adequate salaries.
I think he must divorce himself from what has happened in the nationalised sector hitherto, and not pay too much regard to what has happened in the private sector. The other night somebody was making an analogy with what happened in Unilever, but the considerations which apply to the Unilever board do not necessarily apply to this board. Unilever deal with a great variety of products. Unilever could possibly need 24 members for its board, to deal with the variety of its products and interests. This Corporation, however, will be dealing with a standard article. The products may vary in size and in form and in quality, but it is substantially a standard article, and the Corporation needs only men expert in this standard article. If the Minister wants on his Board men of ability who can direct general policy effectively he must pay the right salaries.
I am glad to see the Minister back. I was saying that I hope he will forget what has happened in the nationalised sector hitherto, and I hope that he will not be too influenced by what has happened in the private sector either. I hope that he will bring a fresh view to this and set out to get high quality men for his public corporation, with a board—not the size of that of Unilever, but smaller—and with the best men he can obtain, paying them adequate salaries. If he does that he will have some chance of making a success of something which I do not think will be very successful.

Mr. James Dickens: I have not participated in the previous discussions on this Bill, but I want to say a few things about this very important Amendment, because it sets out a significant problem which affects the entire public sector.
I think that, to begin with, one has to be very clear about what sort of people should serve on this Corporation. I want to set out three tests which make up the basis of a job specification, as it were, for membership of the Corporation. They are, firstly, a fundamental belief in public ownership and a determination to make it succeed, and this, I am bound to say, has not been everywhere evident in some of the appointments made to public corporations since 1945.
Secondly, the board member concerned should have a thorough knowledge of the


industry and should also have a firm grasp of his particular functional responsibilities. Here I disagree with the hon. and gallant Member for South Fylde (Colonel Lancaster), who cast doubts as to the wisdom of giving board members a clear functional task. I think experience of management of the public sector in this country since the war has shown this is the right course to take.
Thirdly, I think that, obviously, the board member must have a high level of talent in terms of decision-making and in terms of the other qualities which go to make up executive responsibility. These three factors in the main meet what I hope the Minister will set out, if not this evening, then in due course—something approaching a pretty rigorous job specification for appointments of this nature. I am suggesting that the man to fill a position on a public corporation of this kind should be a very different type of individual, in terms of his approach to the job, in terms of his breadth of outlook, and so forth, from that, as I think is the case, with the average board member in the private sector.
I think there is very little evidence to support the view that the salaries being paid to board members on public corporations in this country are in any sense a serious determining factor in either raising the calibre of the boards or of lowering it vis-à-vis the private sector.
5.0 p.m.
In this Bill and in the other steps towards public ownership which we shall have to take in the later 1960s and throughout the 1970s, the public sector must accept the political initiative. It must not accept the standards of the private sector. Because people are highly paid in the private sector does not a priori mean that people in the more senior positions of the public sector should reflect this.
It cannot seriously be argued that there has been any deterioration in quality, for example, in the chairmanship of British Rail under Sir Stanley Raymond than we experienced under Lord Beeching between 1961 and 1965, and yet. Sir Stanley Raymond is getting, I think, only rather more than half the gross salary of Lord Beeching.
In the private sector, salaries are a chaotic mish-mash based on nepotism and

on a variety of irrational pressures. Although the salaries are frequently indefensibly high, what is more important is the great range of "perks", including subsidised meals, free life insurance, non-accountable expenses, subsidised housing and all that. It is these factors which go to make up the real rewards in the private sector and not so much the gross salary. It would, therefore, be a great pity if, in setting up this new Corporation, we accept as our dictum the prevailing level of values in the private sector.

Sir T. Brinton: The hon. Member apparently has not read the last few Finance Acts concerning the expenses of directors and what is declarable and taxable. He might, however, have observed that recently certain Ministers of the Goverment have been provided with free accommodation. Does he approve of that?

Mr. Dickens: I am well aware that the present Government have made an attack on tax avoidance. I am also aware that, despite the energies of the Treasury, tax avoidance is still a major industry.
It is important to note the differences in board members' salaries in the private sector and in the public sector with salaries in, say, middle management in the private sector as compared with the public sector. The hon. and gallant Member for South Fylde has long experience of the coal industry under private ownership. I do not think he would seriously question that under the National Coal Board the salaries of middle management showed a considerable increase over the salaries of equivalent people carrying out similar responsibilities under the former private coal owners, basically because there was a tremendous difference in the private sector between, on the one hand, these indefensibly high salaries at the top and, as I regard them, the rather less than adequate salaries which were paid then and are being paid in many private industries today to people in middle management, who are the people who do the work.
There was an interesting article in the Observer colour supplement yesterday on the Fairfield experiment on the Clyde. The illuminating point came out that when Fairfields were seeking to make appointments in middle management, they invited people from other Clyde


shipyards to apply for vacancies. They were astonished at the very low level of salaries that were being paid in private Clyde shipyards to people who were carrying out important middle management jobs.
Fairfields made the appointment in question at three times the average salary of many of the applicants because they wanted not simply to pay what they thought was the market rate for the job, but to pay what they conceived to be the proper reward for the job. One has, therefore, to differentiate between the indefensibly high salaries of directors in the private sector and, in many cases, the inadequate level of reward in the middle.
In the public sector there are adequate rewards in the middle and at the top. Taking into account all the many responsibilities, I think that the present balance of salary level in the public corporations is just about right. I should be very much against paying substantially higher salaries to board members of the National Steel Corporation. There would be serious repercussions in the other publicly-owned corporations. Certainly, if I were chairman of the National Coal Board getting 12,500 per annum, I should take strong exception if I found my opposite number in the Steel Corporation getting double that figure. This would obviously create a serious ripple of discontent throughout the public sector. It would be entirely needless discontent, because I challenge the view that it is necessarily beneficial to the public sector to attract people from private enterprise into it.
I have instanced the case of Lord Beeching. There are many other examples of people who have been brought into the public sector to carry out a certain commercial job. My point this evening is the need to establish a level of social value for the work which is performed by board members in the public sector, which is altogether different from the private sector.

Sir Harmar Nicholls: The hon. Member seems to have fixed the top limit at £12,500.

Mr. Dickens: Not necessarily.

Sir Harmar Nicholls: The words which the hon. Member has just used could mean only that. He has said that if the chairman of the National Coal Board,

receiving £12,500 per annum, saw somebody else having more than that, as head of the Coal Board he would feel disgruntled. That can only mean that the hon. Member considers that the salary of the chairman of the National Coal Board should be increased if the quality of the Steel Corporation appointment calls for more money, or that the hon. Member is fixing the top limit at £12,500 Is that what he means? We are entitled to know.

Mr. Dickens: The hon. Member has raised an important point. I am not suggesting that the maximum should be £12,500, which is not the highest public corporation salary. I am saying that there should be an upper limit beyond which we should not go. I am not arguing that it should necessarily be £12,500. I am arguing against the case which is built on the premise that to attract people from outside to join the National Steel Corporation we should necessarily have to pay higher salaries. That is a fallacious argument.
We should adopt an altogether different approach. We should henceforth seek to build up a system of public corporation senior management which will be common to all public corporations. We should have central recruitment for the public corporations particularly of university graduates. We should certainly have a public corporation staff college, because the twin basic principles of approach to the national economy and of service to the community, are common to them all.
The level of management, which in my experience is very high, certainly in the National Coal Board, at middle management and generally, should be held at a consistently high pattern throughout all the public corporations. This we can do only by having a centralised recruitment and training scheme, and a public corporation staff college to get the benefit of advice and experience as between one public corporation and another. There should be plenty of movement within the public corporations, from the National Steel Corporation to the Coal Board, to the Airways Corporations, and so on. But this is an altogether different proposition from arguing that there should be a lot of movement from


the private sector to the public sector. Both have different standards of value.

Mr. O'Malley: I should like my hon. Friend to comment on one thing that I said. He was listening when I made my speech. I was not talking about attracting people from the private sector to the public steel sector. I was looking at the level of executive-type salaries within the steel industry, not directors' fees, and so on. I said that there was a problem if we kept the salary levels to those of the existing nationalised boards. What does my hon. Friend think about that?

Mr. Peyton: On a point of order. Would it not be more seemly if this argument between the hon. Gentleman and his hon. Friend were carried on upstairs? We are not very interested in the hon. Member for Rotherham (Mr. O'Malley), with his back to the rest of the House, discussing his point of view with his hon. Friend.

Mr. Deputy Speaker (Sir Eric Fletcher): I was about to ask the hon. Member to address his remarks to the Chair.

Colonel Lancaster: I thought that the hon. Member for Lewisham, West (Mr. Dickens) was saying that he was interested in a system of standardisation. He mentioned the middle area of management. When the coal industry was nationalised, between 48 and 51 area general managers were all paid the same salary. Is the hon. Gentleman suggesting that that was a very wise thing to do? He has been talking about standardisation. That was standardisation, if anything was. All 48 were paid the same salary. Does that make sense?

Mr. Dickens: Perhaps I might reply first to the point made by my hon. Friend the Member for Rotherham. I do not think that there is very much of an argument about the upper salary levels of middle management, which are affected by the salary ceilings of board members. I know that the various professional associations in the public sector always try to argue this case, but if one compares middle management salaries in the public sector with the salaries of equivalent middle managements in the private sectors, one sees that there is not a great deal of difference. What difference there

is is frequently in favour of the public corporations.
I think that the hon. and gallant Member for South Fylde (Colonel Lancaster) is wrong. He will find that the 48 area general managers were not paid the same salaries. They were paid within a salary band. I am not arguing against people being paid within salary ranges or scales. I am not arguing that those in senior positions in middle management should all be paid the same. I agree that senior people at that level should be paid within a salary range. That was the case, and is the case now.
I think that within the public sector we must build up a staff of well qualified and well experienced people, with ample scope for people being appointed to the most senior positions on the boards of all public corporations, from within.
I hope that we have come to the end of the time when we appoint to the boards of public corporations, or to regional boards, people from outside, from the private sector, from the diplomatic service, or from the Armed Forces, simply because they have some vague general administrative experience. Such appointments may be necessary initially. I do not quarrel with that, so long as they meet the job specifications for the appointment in question, but, having got the thing going, we should set about ensuring that we build up a career structure within the industry in question, and seek to extend this idea throughout the public sector.

5.15 p.m.

Sir T. Brinton: The hon. Member for Rotherham (Mr. O'Malley)—I am sorry that he has now left the Chamber—used the phrase "a salary movement any man is worth", yet during most of his speech he appeared to be arguing against himself, because he admitted that it was necessary for the nationalised industries to attract talent and to pay the market price for it.
I should like to draw the attention of the House to the real problem, one which is faced not only by the nationalised industries, but by private industry, too. To people receiving £2,000 or £3,000 a year by way of salary, £30,000 sounds a colossal sum, but part of the difficulty which all employers suffer is that in the remuneration of top-level brains there is


a colossal incidence of direct taxation. I want, therefore, to underline the point which has already been made, that beyond a certain point it requires an enormous increase in gross salary to provide any appreciable increase in net salary.
Let us consider a married man, with no children, living on earned income from his appointment to middle management. Let us assume that he is in the modest level of middle management of the type referred to by the hon. Member for Lewisham, West (Mr. Dickens). If he is getting £3,000 a year, he is able to enjoy only about £2,220 of it. If he wants to treble that income, he must have an earned salary of £15,000 a year. He will then have a spendable income of £6,884. This sum has been spoken of as if it were riches beyond the dream of avarice. Although he would be getting about five times his previous salary in gross income, his net income would be a little over three times as much as before. This would still be a substantial increase, but once one gets beyond that point the tide rises very slowly in terms of net income. A man earning £25,000 a year, would get only £1,000 more net than the man earning £15,000 a year. For an increase of £10,000 in salary he would net £1,000 extra, and get £7,884. When we get to the top salary which has been mentioned during the debate, £30,000, which is regarded as an atrocious sum to pay any man, the net spendable income is £8,321. In other words, between £3,000 and £30,000 it is impossible to quadruple the spendable income, and this is the problem.
Some men work for the love of the game, for the glory and honour of occupying an important and responsible position in industry, be it nationalised or otherwise. Other men—and they would probably be regarded as selfish by hon. Gentlemen opposite, but I regard it as reasonable—are prone to look after their own interests and to see whether they can earn more money. When we talk, as we frequently do, about meritocracy, we are merely following the lines of the American-type industrial civilisation, where it is not only a question of how much money one has to spend on oneself, but a matter of prestige to earn a higher salary than the man next door. I do not advocate this as one of the criteria for the good life, but many people do, and it is stark foolishness to ignore the

fact that brains have to be paid for in most cases.
It is unjust to suggest that men ought to work for less than they are worth in comparable jobs in outside industry. If the yardstick suggested by hon. Gentlemen opposite were to be applied to people on far lower salaries or wages, they would be the first to say that a man ought to get the rate for the job, and comparability between one industry and another is one of the stock arguments used to get an increase in wages during trade union bargaining. All right. I accept that. Why, then, do not we apply it to the most vital people in our civilisation—the great organisers, the great brains and the great technicians? If we do not do so we shall not get what we all want, namely, an increase in production and our standard of living, because these are the people who can give it to us.
I am not advocating this as the sole measure of civilisation but it is what both parties promised at the last Election, the previous one, and the one before that—an ever-rising standard of living. That is the carrot that has been dangled before our people. It may have been over-emphasised, but it has certainly been emphasised and it has become accepted. If we do not pay the best brains what they are worth we shall come a cropper.
To a considerable extent it has been possible to isolate this problem within the confines of this country, but we are already suffering from a brain drain of technicians—men who carry their capital inside their heads and are young enough to take it abroad. In the near future, if we get into the Common Market, with the constant spread of industrial civilisation over a number of countries in combination—perhaps through some kind of North Atlantic arrangement—the Corporation will not be competing with other British firms for the best brains in the country; it will be competing with the whole of Europe, and possibly North America. If we do not provide the rewards which other parts of the world can provide our best brains will be exported or will flee the country to places where they are better appreciated.
The last time I argued this matter was in the case of the increase in judges'


pay. I was horrified at the extraordinary naïvety of some of the speeches made by hon. Members opposite, who simply do not seem capable of appreciating what a value a select few members of the community are to an industrialised society, and how highly such men are rewarded in other countries. Merely because we are paid by an extremely stingy public the sum of £3,250 a year, out of which we have to find a large sum in respect of expense which we have to pay ourselves, I beg hon. Members opposite not to imagine that we can successfully run a highly organised and sophisticated industrial society without paying the men at the top substantial salaries.

Mr. David Marquand: I feel like a gate crasher in this debate, not having sat in through the Committee stage. For that reason I shall be brief. I am rather worried by the wording of the Amendment, which seems to imply the acceptance of the existing salary structure in the private sector of industry and of the forces which cause salaries in that sector to rise and fall as they do. This seems rather a doubtful and dangerous kind of acceptance.
There is much evidence to suggest that the structure of managements salaries in the private sector is now wildly illogical, arbitrary and irrational. If we carry out a really hard-headed inquiry into the ways in which private firms decide on the salaries of their executives we shall find that very few try to work out the total cost of their employees, taking into account not only the nominal salary but all the other fringe benefits and setting these against the net economic return to the firm.
In British industry we find a great range of practices used by the best firms —the largest and most progressive, who use the hard headed, economic approach —and the smaller and medium firms, including family firms, where there is a complete patchwork quilt of illogicality and arbitrariness. For that reason it is dangerous to accept the implied assumption of the Amendment that the practices in the private sector as a whole are satisfactory.
The other dangerous feature about the salary structure in the private sector is its effect on the Government's prices and incomes policy. If we look back over the

way in which the incomes policy evolved in the first six months of 1966 we find clear evidence of a leakage from the private to the public sector which created intolerable pressures for the whole incomes policy. A case in point was the award to the higher civil servants made by the National Board for Prices and Incomes. The Board's report shows that the increase which it gave and which it thought was right was made necessary partly by the fact that the public service was falling behind private industry and there was a danger that good men—very scarce talent—would leave the public service for private industry. That has happened. It was therefore thought right to give a very large increase to well-paid civil servants.
It cannot be denied that that had the effect of undermining the acceptance of the incomes policy among lower-paid workers who saw people very much better-paid than they were receiving increases in many cases larger than their own gross take-home pay. This arbitrary, illogical, confused and irrational method of arriving at a salary structure in the private sector has undeniably had a damaging effect on the incomes policy, which must be accepted as an indispensable weapon of economic management for the foreseeable future, in one shape or another.

Sir Harmar Nicholls: What is the hon. Gentleman's authority for suggesting that the medium and small firms do not know what they are paying and whom they are paying it to and what value they are getting out of it? He stated categorically that small and medium firms fixed salaries without taking into account the purposes for which people were employed and the contribution which they make to their firm. That is a categorical statement, and if he has some experience to back it up he should tell the House. It should be on the record, however, that some of us, who have had many years of close contact with the sort of businesses to which the hon. Member is referring, find what he has said to be an absolute slander.

Mr. Marquand: I do not suggest that every small or medium firm has these tendencies, but I can give one example. It so happens that two days ago I was talking in this House, over lunch, to an


employee of the largest manufacturing consultants firm in this country, whose responsibility it is to investigate precisely the total rewards given to management. That is his job, and he has told me that what I have stated has been the result of his investigation, not of every small firm but many small firms.
That is why I find it dangerous to accept the assumption of the Amendment that the salary structure in the private sector is fine and that the public sector should be brought up to its high level. On the other hand, I agree most strongly with what my hon. Friend the Member for Rotherham (Mr. O'Malley) said, that it would be crass folly to discriminate in this matter yet again against the public sector.
5.30 p.m.
One of the main troubles with the public service is precisely that it is so frequently discriminated against as compared with the private sector. Members of my own party may think that in some way it is non-Socialist to pay high salaries. I agree with that as a statement of general theoretical ideals, but to discriminate against the public sector is an even more non-Socialist thing to do. The effect of it would be, as my hon. Friend the Member for Rotherham said, to damage this new nationalised Corporation just at the point where we want to encourage it, and to make sure that it proceeds in the best possible way.
I do not accept the point made by my hon. Friend the Member for Lewisham, West (Mr. Dickens), that we do not want to attract people from the private sector management into public sector management. It is not true that we ought to erect a great wall of China between the public sector and the private sector, and that we ought to assume that the kind of people needed in the private sector are different from those needed in the public sector, that the sort of managerial, entrepreneurial philosophy in the public sector ought to be entirely distinct from that of the private sector. On the contrary what we need to develop is a concept of public ownership much closer to that which exists in the I.R.I. in Italy, where the basic philosophy is that there should be public ownership, but that the industries and companies should behave in a tough, ruthless, dynamic, entrepreneurial

fashion, just like private industry. It is remarkable to see how effective and dynamic they are. They are judged by the most rigorous tests on the market, and I would like to see that sort of attitude applied to our publicly-owned Corporations as well.

Mr. Dickens: Will my hon. Friend accept that I am not at all against a movement of people from the private sector into the public sector at middle-management level? I am against it at director level. Will he also accept that many people at middle-management level in the public sector feel justifiably aggrieved when they see that board members are recruited from private industry over their heads and that some of those recruited have precious little knowledge of the industry.

Mr. Marquand: I appreciate this point, but we ought not to elevate into a general principle that it is wrong to have transferability between the two. I would say in answer to that that management running the public corporations would take account of this difficulty and would be very chary of promoting people over the heads of middle-management. Exactly the same thing would presumably apply to the private company thinking about whether to import someone from another private company into a senior position. There is no basic philosophical difference between the two problems.
In conclusion, the Government in the immediate future must make sure that they compete for the best brains and that they pay the market rate for them. It would be disastrous and suicidal to do anything else with the publicly-owned steel industry. On the other hand I urge my hon. Friend to tell us that the Government are ready to set up a thorough-going review of the whole question of the structure of management rewards, taking not just the salary and the fringe benefits into account, but all of the other emoluments. What ought to be done is that the whole question should be referred to the National Board for Prices and Incomes so that we can have an independent public body pronouncing on this vexed question. There is clearly room for disagreement, there are differences in the House, but we need an authoritative pronouncement upon them.

Sir S. Summers: If anyone was concerned at the future of this industry under nationalisation, they would be quite appalled at the prospect if the hon. Gentleman the Member for Lewisham, West (Mr. Dickens) were to have his way over the manner in which it should be operated.
Both sides have referred to the proposition that people should be paid the rate for the job. The debate on this Amendment is whether the rate for the job shall be that which the people of the right calibre can command in another industrial position or whether it shall be that determined already by what is paid to the senior members of other nationalised boards.
I hope that enough has been said on this subject to make it quite clear that it would be disastrous and a grave handicap to the Minister's plans to make this a successful industry if he were to put a ceiling on the salaries to be paid to those whom he wishes to recruit because of the limited salaries already being paid in other nationalised industries. It has already been pointed out that we are not starting from scratch. We are to superimpose upon a number of companies who are to be formed into groups, a series of individuals with paramount authority over them and unless those already in the industry are to have their salaries lowered in keeping with the ceiling which some hon. Members opposite would wish to see imposed, the only alternative is that the salaries already being paid should be increased for those who will be put on top.

Mr. O'Malley: Would the hon. Gentleman also bear in mind that there is an important problem here not only with regard to the full-time members of the Board but also the part-time members? If they are to be paid at £1,000 a year one may well find people who have other directorships, but there may be many trade union officials, prepared to take the job but who will not be able to do so at £1,000 a year, because they would have to pack up any other sources of income.

Sir S. Summers: I am not quite sure that I have grasped what it is the hon. Gentleman is trying to say, but I am not here concerned with what should be paid to any part-time members of the Board. I cannot believe that that presents

the Minister with any problem. The problem is what share shall be the salaries for the full-time members. No one has yet mentioned that, in deciding which of these two criteria shall be used to determine the level of salaries, the circumstances of the steel industry will differ in certain very marked respects from any other public enterprise that has yet been taken over.
In the first place, it is essentially concerned with manufacturing and is not a service industry. In itself this distinguishes it in a fundamental characteristic, and explains why some of the elements already existing in the industry are different from those existing in other industries. Secondly, it will be concerned with exports to a far greater degree than any other public enterprise that has been taken over.
There is no question, in the electricity industry, the gas industry or on the railways, of having to compete with other producers. This means that it is even more important to ensure that the best possible talent is available, so that we can compete in sales markets with overseas steel producers. We are also concerned with competition, not perhaps so great as that from overseas, from other materials. In all these respects it is essential that the Ministry should in no way be handicapped in trying to get the very best possible talent, if, unfortunately this industry is eventually nationalised.
There have been glib phrases about salaries and matters of that kind. It is not sufficiently appreciated that judgment of what it is proper or sensible to pay should be looked at as being in the nature of an investment. The argument is never brought up on social grounds when one is investing in a piece of machinery, some new idea or invention. But when it comes to individuals certain characteristics of an emotional content are brought in which completely distort the fundamental criteria, which under the capitalist system it is proper to bring to bear, upon what it is justified to invest in the employment of a particular individual with certain talents.
One of the reasons why it may be quite right to pay a very high salary to a certain person is because of the chance which will follow, of enormous success


or crashing failure, if someone with such a high responsibility reaches the wrong decision. The pyramid of responsibility makes it inevitable that those at the top shall get a greater slice than those all the way down. It also follows that there is scope for mistakes or for great success. This applies in greater measure to the person who is highest in the pyramid because there is higher ability and greater decision. No one regrets the prospect of this industry being nationalised more than I, but if it is to come about I hope that nothing will prejudice the future success of it and I hope that the Minister will have enough sense to realise that he must not handicap himself by an artificial ceiling on salaries, brought about by reference to other nationalised industries.

Mr. James Tinn: My hon. Friends the Member for Rotherham (Mr. O'Malley) and Ashfield (Mr. Marquand) expressed so ably my own point of view that it will not be necessary for me to detain the House long. I feel that it will be worthwhile to intervene as I believe that I am one of the few members who has worked as a trade unionist in the iron and steel industry.
5.45 p.m.
I agree with my hon. Friend the Member for Rotherham that the types of salaries which he envisaged being paid to members of the Corporation would not in any way breach the prices and incomes policy. Quite the contrary. If we could, as a result of nationalisation, so streamline the boards and reduce the number of directors in the way he suggested—from about 240 to double figures —it would be an exercise in productivity which my right hon. Friend the First Secretary would be glad to see repeated elsewhere.
I take issue with the hon. and gallant Member for South Fylde (Colonel Lancaster) who did not seem to grasp the extreme complexity of the industry. This complexity distinguishes it from the other publicly-owned industries, as does the fact that it interlocks so closely with other manufacturing concerns. It impinges upon and is interwoven with manufacturing industry to a degree unprecedented in the sphere of public ownership. This is particularly relevant to the Amendment, with which I have some sympathy, although many doubts.
As a trade unionist and as an hon. Member who represents an iron and steel constituency, my overriding obligation in this discussion is to ask the House to bear in mind the health and prosperity of the industry and to do all we can to ensure that it remains strong and develops. It is essential, therefore, that this matter should be settled in the most effective and constructive way. I recognise the difficulties of determining a just remuneration for a directorship and the difficulty of relating such appointments to workers who are on much lower rates of pay. This is also bound up with the whole range of directors' emoluments in industry generally. Bearing this in mind, it is vital that we should not in the Bill impose on the Minister a strait-jacket which would restrict him in the appointments that he thinks should be made.
The best way to proceed is for the Minister to be allowed to discover what needs to be paid to obtain the talent that is needed to do the job. I hope that in doing this my right hon. Friend will arrive at salaries which will benefit the industry rather than the Treasury. Thus, while I have sympathy with the purpose of the Amendment, I hope that it will be withdrawn so that my right hon. Friend may be free to determine the type of salary structure which he finds from experience to be necessary to obtain the leadership which will enable the industry to make the vital contribution to our economy which it has made in the past.

Mr. J. H. Osborn: The hon. Member for Cleveland (Mr. Tinn) made a constructive contribution to what is a difficult debate. In terms of the future prosperity of the Corporation, this is one of the most important subjects we have debated on Report so far. I am, therefore, disappointed that the Minister, who took such an active part in our Committee proceedings, has today flitted in and out of the Chamber and appears to be leaving it to the Parliamentary Secretary to answer the controversial and important points that have been raised.
The hon. Member for Rotherham (Mr. O'Malley) told me earlier that he would raise this matter and we discussed our proceedings in Standing Committee. After that conversation, I looked up the OFFICIAL REPORT of those proceedings.


My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin), reminded the Committee of the salaries being paid by the nationalised industries. He said:
Out of the total of 38—the 34 and the four nationalised corporations—11 below £15,000 include all four nationalised industries."—[OFFICIAL REPORT, Standing Committee D, 3rd November 1966; c. 300.]
We again raised the matter on the Clause stand part and at that point my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) reminded us that from a salary of £24,000 a year, £17,000 went in tax while the recipient, with two children, retained only £7,000. I now raise this matter partly because of the conversation I had with the hon. Member for Rotherham and partly because the Minister stated in Committee:
I am not detracting from my view and the Government's view that this question of fixing salaries, when it needs to be done, is an important job.
While the right hon. Gentleman uttered those words, he is unfortunately not in his place now, particularly since he also said:
People's positions will generally not be affected in the industry. We have not reached a decision on the level of salaries for the Corporation, but I have put forward some of the arguments to be taken into account in determining that."— OFFICIAL REPORT, Standing, Committee D, 10th November, 1966; c. 394–5.]
We should now be given a more definite indication of what the Minister's ideas are on this subject. As I have complained before, and will go on complaining, far too much of the nationalising process is going on not in the House of Commons but in the deliberations of the Organising Committee.
The debate has shown that there is a rift among Government supporters. Perhaps "rift" is too strong a word. Certainly their remarks have shown egalitarianism and shades of bureaucratic approach, and the speech of the hon. Member for Ashfield (Mr. Marquand) showed that he had little appreciation of the problems involved in getting the best people in the international sense.
I have been faced, not only in this country but overseas, as have many of my hon. Friends, with the problem of picking the best men for the job. One of the greatest difficulties is that the best

man for the job knows that he can command a high salary. As my hon. Friend the Member for Aylesbury (Sir S. Summers) said, when one has spent a large amount of money on plant and equipment and one is going to incur large losses unless one's factory is run properly, the salary one pays to a good man is immaterial compared with the losses that might be made.
Since this point has been raised on previous occasions, I will not reiterate it, except to ask the Parliamentary Secretary to ensure that his right hon. Friend bears these important issues in mind. The appointment of the right senior executives—which means the right salary structure—is the key to whether or not the Corporation will succeed. If the right decisions are not made, we will have a managerial brain drain from this country, as some of my hon. Friends have pointed out.
When I was in the Batello Institute at Columbia, Ohio, in the U.S.A. about three years ago I was talking about the brain drain of scientists and technologists, I discovered that the managerial differentiation between the United States and this country was somewhat greater than the differentiation which normally exists in the scientific sphere. Many observers will confirm that this is so.
This is an important issue, particularly in Sheffield, and it has been raised in the Sheffield Morning Telegraph more than once. That newspaper indicated that this matter will probably go against the prices and incomes policy. I suggest that to pay salaries that are already being paid would not be going against the prices and incomes policy; and I hope that the Parliamentary Secretary will confirm that this is so.
I recall a discussion I had with my right hon. Friend the Member for Wallasey (Mr. Marples) when he was Minister of Transport. That was at the time when Dr. Beeching was appointed. Since then we have appointed Lord Melchett at £16,000 a year—it might be £15,000; hon. Members do not seem certain of the figure, and I hope that the Parliamentary Secretary will make that clear as well—and this implies that those who are already obtaining salaries higher than that figure need to be worried about their future. Some remarks of hon. Gentlemen opposite suggest that, "If they are not worth it, they should not get it." But


suppose they are worth it. Will existing service contracts apply? Some of these contracts run for five or even 10 years. Will these contracts be scrapped immediately the Corporation takes over? if so, I assure the Parliamentary Secretary that not only in Sheffield but elsewhere people may not be willing to show their expertise in the steel industry—not when they can look to others who may wish to employ their services—not only Europe and North America but to the new industries growing up in Africa and Australasia, and where their worth is more valued in the international bartering between companies who want the best brains. We have good managerial talent here and I hope that we will be allowed to keep it.
To sum up, I want to know just two things; what is the Government's policy on the question of the salary structure for the industry and whether salaries now paid to staff and executives which may be higher than that of the chairman of the Organising Committee, will continue to be maintained? Secondly will existing agreements and terms of employment remain valid after vesting day?
This is a difficult debate for the Parliamentary Secretary to answer. I am disappointed that the Minister is not here to reply to this important issue, and I suspect that the right hon. Gentleman and the Government are running away from the real issues and are not letting us know what their policy really is.

6.0 p.m.

Mr. Hugh D. Brown: Contrary to my usual practice, I have no qualifications for taking part in this debate. I was neither a member of the Committee which did such a good job on this Bill, nor do I represent a steel constituency. The contribution I want to make may be all the better for not having either of those qualifications. I hope that someone on the Front Bench will pass on to my right hon. Friend the Minister of Social Security the impending hardship which seems to be envisaged among boards of directors in the steel industry. This, I am sure, would make a substantial contribution to the harmony which exists in certain quarters. This is a serious subject. I do not think it is one on which either side can afford to suggest that it has the right answer, or all the answers. It is certainly im-

portant to us on this side of the House because of the effect it has on the thinking of the man on the shop floor. With all due respect to the talk about managerial brain drain, this policy seems slightly confused between management and duties and functions of a board. This requires a little study. Unless we can convince the man on the shop floor, working in the industry, that this is of vital concern and has something to do with changing the attitudes of people to work and to society generally, it does not matter how brilliant are people who are put at the head of the Corporation, it will not be successful.
That is the dilemma which is facing all of us—not only the Minister or hon. Members on this side of the House. It should be given a little more thought by hon. Members opposite, apart from representing only the professional or business interests of those who have put them there. They should sometimes challenge to a greater extent remunerations, rewards and fringe benefits paid at the moment in private enterprise. As a new Member who came here two years ago, I thought that one of the best Bills ever introduced in this place was that introduced by my hon. Friend the Member for Stepney (Mr. Shore). I hope that at the Department of Economic Affairs his influence can be used to do something about adjusting rewards in society.
We should not under-estimate this matter. We have heard of the dilemma of hon. Members opposite. It is argued that there is not much difference between £30,000 a year and £17,000 a year. We have heard the argument that if a man is paid £17,000 a year has only £7,000 a year to struggle on with after the tax. This is not vituperation from some class-biased Labour Member of Parliament. We are not "with it" if we do not understand that to the majority of people £17,000, leaving £140 per week after tax, is quite unnecessary. Surely there is a limit to the things on which one can spend money to bring happiness. It is all very well saying that this will not be a practical approach to those invited to serve on the Corporation. What about inviting volunteers? I am only joking and I say it in a kind of half-hearted way.

Mr. Patrick Jenkin: Does the hon. Member recognise that for the Industrial Reorganisation


Corporation Board that is exactly what the Government have got?

Mr. Brown: There may be something to be said for this. The Amendment says, "of proven ability". How can one prove the ability of someone without appointing him to a new position? There are one or two successes and failures in Government. How does one guarantee that a Minister of Power will be a success until one gives him the right to operate in the job and show that he can be a success? When we apply this outside, we find that we can never guarantee that a man appointed to a new position will be a success. The Amendment is therefore a little fatuous. Its only purpose—I think a useful one —has been to enable us to discuss some of the difficulties we face in society.
We should like the Minister to have a free hand to some extent to test the market. One result may be to find precisely the level of remuneration of outside directorships, whether they have penthouses or villas in Spain. Is it right that they should have them? If so, what about giving the members of nationalised industry boards something like this? Is this what builds up the prestige of the job?

Mr. Eric Lubbock: I read somewhere that the average remuneration of directors of I.C.I. is £26,000.—[An HON. MEMBER: "£32,000."] An hon. Member corrects me. That figure is found by taking the whole remuneration of the board of directors and dividing it by the number of directors.

Mr. Brown: I do not know for what that contribution was intended.

Mr. Kenneth Lewis: Will the hon. Member accept that the difference is that while those in free enterprise may have penthouses either in Park Lane or in Spain, those in the nationalised industries are given peerages?

Mr. Brown: That interruption is not even worth replying to. I recognise that this is a very serious problem facing the Government and not only the Minister. It has wide implications. In the light of the wage freeze of course men and women are entitled to say, "This is an absurd salary to pay to someone when we are limited or have no expectation in our lifetime of reaching this dizzy height".
We have all to ask ourselves this question from time to time. We can overdo this looking for professional and technical know-how. Even though this is a complicated industry—I have no personal or close knowledge of it—with society developing as it is and becoming more complicated, technical and sophisticated, as soon as someone is lifted from his technical job and put on to a board or into a position of administration he ceases to have any great value as a professional technician. It becomes a new kind of science of administration. In nationalised industries we have such people as a doctor of medicine in the White Fish Authority. In case hon. Members think that that is a criticism, I should say that incidentally he is a very good member. We have all sorts of people with first-class administrative ability. We are looking for people with general knowledge of the needs of an industry and the situation in the world and with a fairness of mind to sort out conflicting pressures which can be put on a board from the various technical and professional interests within the organisation, whether it is a steel board or a private firm.
I am amazed at the arrogance of hon. Members opposite and all this pleading when we find that directors can be in companies which produce soft drinks on the one hand and shoes on the other. Apparently some can sort this out in their own minds, but in nationalised industries there has to be a closed shop. They have to be taken from the experts with "proven ability" in a chosen field because they are friends of the Conservative Party. Bearing in mind a disastrous appointment made from Stewart and Lloyds—I shall, not go further—it is high time we gave more thought to people who genuinely believe in the benefits of public ownership and more thought to morality in this sick society and sick world. Perhaps out of this discussion some of us may get enough information to produce a new Tory M.P.s' Left Book Club, which is badly needed.

Mr. Peyton: But for some of the last observations of the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown) I would not have referred to his speech, but he referred specifically—and it could have been by name—to one appointment


which has been made from Stewart and Lloyds. It seems very odd that among the qualifications which the hon. Member listed for appointment to the Corporation he did not mention knowledge of the steel industry, which I should have thought should come high on the list.
As to his disapproval of Mr. Macdiarmid's appointment, it seems grossly unfair. There is no great allegiance between him and the Conservative Party and I do not hold a brief for him, but it is utterly wrong and grossly unfair for hon. Members in the House of Commons to cast aspersions of that kind without having any ground for doing so except pure prejudice.

Mr. Hugh D. Brown: I am not casting any aspersions on either Mr. Macdiarmid's knowledge of the industry or his integrity. I am casting aspersions —rightly—on his known advocacy of anti-nationalisation.

Mr. Peyton: On a number of occasions in Committee I pointed out to hon. Members who support the Labour Party how very galling it must be for them that, when the Minister is confronted with the task and responsibility of finding appointees to the Corporation, he goes, first, to the City of London and, secondly, for a deputy chairman, to the industry which his party has castigated as being old-fashioned, out of date, and all the rest of it. Of course it is galling for them. The hon. Gentleman should not make the comments of the type he has just made.
If I may say this to the hon. Member for Cleveland (Mr. Tinn) without embarrassing him, his speech made me feel very sorry indeed that we did not hear more from him in Committee. That is not a sarcastic remark. It is made sincerely. His speech was easily the most sensible that we have listened to from the other side of the House. That, I am sorry to say, is not a very generous compliment.
We had from the hon. Member for Rotherharm (Mr. O'Malley) the willingness, apparently—I think on the whole he went through with it—to pay the rate for the job. It appeared at one point that he was not prepared to pay the top rate for the top job. We cannot isolate our industrial affairs from those of any

other country. I care not a jot for the political beliefs of these people. If British industry is to be run properly, we must have the very best people. To suggest that such people will not be influenced by salaries is to deny them one of the weaknesses of human nature from which we all suffer. It is the greatest of hypocrisy on the part of Members of Parliament and Ministers, who have just given themselves a whacking big increase, to make some of the remarks which have been made today.
The hon. Member for Lewisham, West (Mr. Dickens) had to return to this old cry of nepotism. I wonder how many times he has been round a steel works. I wonder how many people he knows who work in the industry. I ask him to consider whether the last two Presidents of the British Iron and Steel Federation stand up to a charge of nepotism. I refer to Sir Julian Pode and Mr. Edward Judge. Are they people who climbed to such dizzy heights purely because of family privilege? The hon. Gentleman knows, or should know, that this is not the case.

Mr. Dickens: I make no comments on the two examples given, but I repeat my charge. Under private ownership our iron and steel industry was riddled with nepotism. This is one of the most serious defects in a management structure that is abysmal.

Mr. Peyton: The hon. Gentleman will believe anything. If he makes a tour of our iron and steel industry and goes round a number of plants which I have been round and looks for examples of nepotism, he will find it very hard to substantiate his allegation.
One hon. Member said that tax avoidance was a major industry. At the time he said it I muttered in an undertone that, if the present Government go on the way they are going on, it will probably be the only industry we have left.
I come to the real point which we are debating. At this stage I particularly invite the attention of the Parliamentary Secretary to the Ministry of Technology who, I understand, is to reply. On 10th November, some 10 weeks ago, the Minister used these words:
We have not reached a decision on the level of salaries for the Corporation, but I have put forward some of the arguments to be


taken into account in determining that."—[OFFICIAL REPORT, Standing Committee D; 10th November. 1966, c. 395.]
I do not think that it was unreasonable for hon. Members who served on Standing Committee D to express disappointment at not being told during the passage of the Bill through Parliament about a matter of major importance. Hence, the length of this debate. It seems to us even more odd that apparently we are still to be none the wiser. The mere fact that the Minister of Power is not to answer this debate indicates to our now suspicious minds that no major announcement is to be made. Such things do not come from the Parliamentary Secretary to the Ministry of Technology. I believe this is a matter of considerable importance. It has a great effect upon all the other nationalised industries, however willing they may be to keep quiet during the period of severe restraint, or whatever we like to call it.
6.15 p.m.
Over the years the Treasury has been exceedingly tiresome on this subject. Naturally I have not discussed this point with the Minister, but I need no convincing that he probably wants to do the right thing here. I have no doubt whatever as to the pressures he is under and the reasons which are before him. He is prevented by two considerations—first, some of the more flabby comments made by some of his hon. Friends on this subject; and, secondly, the obstinacy of the Treasury, whose ideas of economy and saving are laughable. We all know the classic example of stopping a project half way through so that there is a building without a roof and which no one can use just in order to defer the expenditure a little. In view of the vast sums of money which are at stake in this industry, I cannot think that this pinching attitude which we have come to expect from the Treasury is appropriate
We cannot afford to have anyone except the very best people running this industry, particularly now at a time when the Government have foisted on the industry a whole lot of new problems because of a new organisation. In these circumstances it is shocking that we should be even going through the uncertainty that we are on this question and that it should have been necessary to table the Amend-

ment. Though I do not mean this in any unkind way to the Parliamentary Secretary, I very much doubt whether he or half a dozen of his kind are likely to shift the Treasury from a position which it has occupied for very many years. However, it is high time that it was generally accepted in all parties and throughout the Civil Service that a policy of parsimony should not be pursued towards those who are responsible for these vast national assets.
It is odd that we, who have been accused so often of being vindictive, unkind and malicious in our attitude to the nationalised industries, should this afternoon be advocating a fair deal for those who will have the vast responsibility for their handling. I find the Government's attitude incredibly disappointing. I am prepared to acquit the Parliamentary Secretary of any responsibility, and even the Minister, though I am sorry he is not here. I would acquite the Minister of everything, except having denied Parliament this information during the passage of the Bill. That is the only charge I make against the Minister. For the rest, I have a certain sympathy for him in that he is subject to some fairly doubtful bad influences, only partially redeemed—because he is one among so many—by the hon. Member for Cleveland, and also because the Minister is up against the brick wall of Treasury opposition.
There have been references in the Press to the employment in these positions of retired people from elsewhere who can give the benefit of their general experience. This surely must be absolute nonsense. I am sure that the Minister cannot be contemplating anything so foolish. I very much hope that the Parliamentary Secretary will at least forward to the Treasury some of the comments which have been made this afternoon from this side of the House. We know that the Treasury is not addicted to taking too much notice of Parliament, but it would be nice to think that the Treasury was to be made aware of the fact that, in our view, one of the most foolish economies it could make would be to insist on depressing not only the level of reward but ultimately the standards of the men who serve and lead these nationalised industries. If in the years to come the other industries have to be brought up to the higher level now


established, this will only be justice postponed.
I hope the Government will not bow to any of the foolish pressures from their own side but will accept that they will be guilty of a breach of trust in their initial handling of this industry on which they are laying their ugly hands if they do not find the best men to take charge.

Mr. Edwin Wainwright: I think I can go a certain distance with the hon. Member for Yeovil (Mr. Peyton), especially when he says that we want the best men for the job. Of course, we do. This nation is entitled to demand the best men in this industry. But even brilliant men do not always give of their best unless their hearts are in their jobs.
I do not want to level any criticisms against the major appointments in this industry, because it is obvious that these gentlemen whom we are discussing have taken over a very difficult task with the full intention of giving their best, not only to the industry but to the nation.
I get a little perturbed sometimes when I hear hon. Members opposite deploying arguments for higher salaries in the nationalised industries. I note that they usually speak on behalf of the managerial side, and especially the upper crust, rather than for the men on the shop floor. I would not give to the hon. Member for Yeovil any marks for being a good trade unionist because he is rather sectionalised in his views, as are many of his hon. Friends. It would be foolish to think that men can be attracted to an industry of any kind unless they are offered reasonable salaries, though I never lose hope that there are some men in this country who do not attach undue weight to the amount of money they receive for the job they do.
It has been said that when a man is receiving £10,000, £15,000 or £20,000 a year, another £2,000 does not mean too much. When that sort of argument is deployed I wish that hon. Members would appreciate that a man who applies for a job carrying a salary of £20,000 or £25,000 has certainly taken into account how much will be left as gross salary after deduction of Income Tax. So, obviously, has the employer. To argue about the gross figure and to talk about

the deduction of tax is tantamount to saying that neither the employer nor the employee has taken into account the resultant salary. The argument about Income Tax, therefore, is not a good one. In addition, may I point out that when hon. Members mention such sums as £25,000 it gives to the public the impression that that is the salary which will be received. That is not so, and I suggest that we ought to talk about the realistic sum that will in fact be paid.
Hon. Members opposite who speak on behalf of the people who are to run this industry have not put their case too well. When they argue salary with salary they do not take into account some of the fringe benefits which men in private industry obtain, especially those with directorships. They get some advantage from bonus shares and rights issues. Therefore, if one compares a salary of £25,000 in a nationalised industry with £25,000 in a private industry, the man in private industry obviously will have a better salary. It is difficult to understand what hon. Members opposite have in their minds when they adopt this sort of argument. Do they want to make sure that certain gentlemen are appointed to a nationalised industry so that it can be denationalised at some time in the future? I hope this is not what is in their minds, for it would be betraying the nation. No matter what we think about nationalisation or private enterprise, it is essential that this industry becomes the most viable steel industry in the whole world.
Hon. Members opposite should realise that our steel industry is not the efficient industry that we want it to be. An article in the Observer on 8th August, 1965, said that in the Youngstown Sheet and Tube Company in the United States, 95 people are required to produce £1 million worth of steel, whereas in Stewarts and Lloyds it takes 259 people to produce the same amount. I said that in Standing Committee D on 3rd November last, and it is reported at c. 213 of the OFFICIAL REPORT.

Mr. O'Malley: Since we are on the subject of Stewarts and Lloyds—Mr. Macdiarmid is chairman of that company—and if we are talking of efficiency, as the hon. Member for Yeovil (Mr. Peyton) was doing, may I ask him to bear in mind the poor exports of Stewarts


and Lloyds and the failure of that company to provide the capacity that we need?

Mr. Speaker: Order. We are wandering into detail. The hon. Member must come back to the Amendment, which is about the salaries paid to the members of the Corporation.

Mr. Wainwright: I should have liked to have followed what my hon. Friend the Member for Rotherham (Mr. O'Malley) said, but I shall have to conclude this part of my argument with my comments on the number of men required in this country to produce £1 million worth of steel.
On the subject of the limitation of salaries which has been suggested by some of my hon. Friends, I think they are right to a great extent. They consider the problem in a different way from hon. Members opposite. As I said earlier, salaries are not everything. If we have reached the stage where we accept that every man in industry is determined to get the utmost from industry in the way of salary and other benefits, then we accept the Tory philosophy of human nature. However, we on this side of the House do not accept that philosophy. We believe that a viable steel industry can be established in this country.
On the other hand, let me say this to my hon. Friends who are arguing about comparable salaries. This is, of course, an industry that is quite different. It is, as my hon. Friend the Member for Cleveland (Mr. Tinn) mentioned, a very complex industry. Furthermore, as a result of this Bill the industry will be more diversified than it was previously. That means that more and more we want intelligent and successful management. Do not let us forget that, in so far as this industry has not been allowed to increase at the same tempo as many other steel industries throughout the world, a good deal of capital will have to be poured into it. We want to make certain that that capital is used to the best advantage. There again, it is essential that we should have the best men that we can find to take charge, because it is not much use investing £100 million or £200 million in this industry, and then putting someone in charge who proves

to be incapable of running the industry to the best advantage.
6.30 p.m.
Therefore, the Minister of Power must —and I am sure that he will do so—take note of what is being said in this discussion. I do not think that it is really worth while dividing the House over this Amendment. Nevertheless, it is essential that the Minister should take note of the points of view which have been expressed. I hope that the Parliamentary Secretary will pass on to the Minister what has been said. I hope he will bear in mind, when he is making these appointments, that the future is important and that the training of future management must play a vital part to ensure that the opportunity is there for men on the shop floor to work their way up and to take charge of this tremendous industry. If we can be assured that this sort of operation will take place, the industry will in future be of tremendous benefit to the economy of this country.

Mr. Kenneth Lewis: I hope it will be noted, not necessarily by you, Mr. Speaker, but by hon. Members generally, that the longest speeches have come from the other side of the House, and, if we go very late, it will certainly not be due entirely to hon. Members on this side. I shall try to be as brief as I can. The only thing that can be said, arising out of our discussion and whatever reply we get from the Parliamentary Secretary, is that at least the members of the Corporation will receive a higher salary than the Minister receives. I hope that too much will not be made of this, as the Minister will probably recall that his salary was cut by the Prime Minister who, for political reasons, decided that he could not go as high as was suggested by the inquiring Committee.
The Minister has a number of options in fixing these salaries. It has been suggested by some of my hon. Friends that he should take into account the salaries that are paid in other nationalised industries, and this has been refuted by others on both sides of the House. Any suggestion of a pattern of salaries for nationalised industries generally was broken by my own party when in Government when we brought in Dr. Beeching to run the railways and paid


him a salary which was in accordance with what he was getting before he joined British Railways.
There is no particular reason why the Minister should take into account salaries which have become a sort of norm generally in the nationalised industries.
He has, it seems to me, four options. He can pay the public service rate, the kind of rate that is paid in the nationalised industries or in the Civil Service. Secondly, he can pay a rate dictated by sheer politics. He can pay a rate that is an amalgam of those two, a public service rate somewhat pared down or put up slightly, as a result of comments of hon. Gentlemen opposite on the Left wing of his party. Finally, he can pay the market rate.
If he pays the public service rate in an industry of this kind, a manufacturing industry he will do a great disservice to the industry and he will act contrary to his declared intention throughout that it is his idea and aim that this nationalised Corporation should, as far as possible, at any rate, be run as a commercial concern. There is no room for paying so-called public service rates in a commercial concern.
If he decides to pay the rate of sheer politics, then, of course, he will take notice of speeches made by hon. Members opposite this afternoon who have suggested that people should serve in this industry both at the Corporation level and at the director level of the separate groups, and even further down, without regard to salary; that they should do it on the basis of the views of hon. Gentlemen opposite that, because the worker does not get a very high income, the directors, the executives and the managers should come down to the workshop level.
This may be a very good sentimental idea, but, of course, it is utterly impracticable. Indeed, in this industry, where there is really very little complaint about workers' rates, it makes nonsense, because this is one of the highest paid of all industries for the ordinary workers. There ate workers in this industry who are pulling out £40 a week, and there are executives whose salaries at present are running very close to what is being picked up by the workers themselves.
If we get down to this idea of using rates of pay within the nationalised industries as a sort of leveller, we are saying to the technicians, the executives, the managers, the people with brains in the industry, "You had better go out and buy yourselves a shop or set up your own little business, because you will make more money that way than you will in the iron and steel industry, whether it is nationalised or not". So the Minister had better disregard what has been said by some of his hon. Friends. Otherwise, he will finish up by losing the talent he already has in the industry, and he will not be able to recruit any new talent in the future.
This leaves us with the final option, the market rate for the job, the rate that is already being paid. Incidentally, one of my hon. Friends, in raising the question of present contracts, raised a question of considerable interest. We should like a reply from the Parliamentary Secretary on this because, if present contracts come to an end, they have to be bought out. If the Minister does not intend to pay the present rates fulfilling present contracts, presumably a "bowler hat" award will have to be given. A certain amount of this will be tax-free, and, if it is, it will probably cost the Corporation more to do it that way than if the Minister continued the present salaries.
The market rate for the job is the only rate to pay to put into this industry the incentive that is as necessary in a nationalised industry as it is in any other. It is the only rate to pay if we are to keep the right people. It is the only rate to pay if we are to get the best people.
Hon. Members opposite were a little upset when I countered the suggestion of penthouses for private industry with peerages for directors of nationalised industry. But there is a good deal in that. There is always a danger that a Minister will do a deal with the chairman or members of the board of a nationalised industry—I am not suggesting that it is likely to happen in this case—

Dr. Bray: Lord Melchett is a peer already.

Mr. Lewis: The Minister has a chairman who happens to have a peerage, but there are other honours. It is possible for a Minister to say, "You must take a lower salary and, in return, I shall see


in due course that you get the rewards which are normal in Civil Service and public appointments". I hope that he will do nothing of the kind.
I am very suspicious, nevertheless. The Minister is not to answer this debate. He does not want to commit himself. Unless he is prepared to say that the Parliamentary Secretary will give us the answer, I doubt that we shall have the answer from the hon. Gentleman I think that the Minister wants the House of Commons to finish the debate so that he then can quietly make up his own mind and have a shoddy compromise —not the market rate but a sort of twilight rate between what the nationalised industries at present pay, what the Treasury thinks would be appropriate, and the market rate. This will not do, and I hope that the right hon. Gentleman will not succumb to it.

The Minister of Power (Mr. Richard Marsh): I intervene at this stage only to say that the hon. Gentleman must not read any great significance into the fact that I am not to reply to this debate. The only reason why I am not replying is that, for a large part of the afternoon, I have been meeting other people to discuss an entirely different subject, and I thought that, on an issue such as this about which both sides feel strongly, it would be wrong to come in with a prepared speech and wind up a debate which I had not heard.

Mr. Lewis: I hope that, in view of the long debate we have had and the interest taken in the subject, the Parliamentary Secretary will be instructed by the Minister to tell us what will be done and not burke the issue.

Dr. Bray: We have had a long debate on this important matter, though I am sure that my hon. Friends will agree that there are many other important issues involved in the nationalisation of steel, some of them, perhaps, affecting a rather greater number of people working in the industry than are affected by this particular question, to which we should be giving our attention soon, and at an earlier rather than a later hour of the night.
We on this side appreciate the touching concern of hon. Members opposite that the nationalisation of steel should

be a success. To be fair to hon. Members opposite, this is a real concern on their part, and I think that there is a good deal of substance in the point which many of them have made that it is relevant to consider the salaries to be paid to members of the Corporation. However, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) should not take the Sunday Express as necessarily conveying the milk of the gospel in terms of the truth about the situation. There is no possibility whatever of the National Steel Corporation being treated as a dumping ground for "worthy bemedalled ex-diplomats and generals". Perhaps the Sunday Express got confused with the list of members of the Carlton Club. Neither is there any possibility of it being treated as a dumping ground for anyone else. I flatly deny the rumour that the right hon. Members for Bexley (Mr. Heath) and for Streatham (Mr. Sandys) have been along to nominate one another for consideration for the Corporation.

Mr. Ridley: Or the right hon. Member for Newton (Mr. Lee)?

Dr. Bray: Or my right hon. Friend the Member for Newton or the right hon. Member for Altrincham and Sale (Mr. Barber)—neither of them, no.
We must have first-class people on the Corporation just as we must have first-class people as members of the boards of other nationalised industries. The steel industry is a great industry with great responsibilities. However, the Amendment suggests a curious criterion—that in any event the salaries of members of the Corporation should not be lower than the level in comparable industrial enterprises. What are comparable industrial enterprises? Do we take the British Printing Corporation, with Mr. Harvey helping himself to £100,000 a year? Are we to go to the most preposterous level that any private company may choose to set for itself, with the very tenuous control exercised by shareholders over the salaries of directors? The criterion does not bear examination, and we certainly could not accept the Amendment.
6.45 p.m.
My hon. Friend the Member for Rotherham (Mr. O'Malley) said that in the steel industry we must pay what we need to pay to get the right people to do the job.


This is a powerful argument. But so is the argument put by my hon. Friend the Member for Lewisham, West (Mr. Dickens), that we need to develop within the steel industry, and within nationalised industry generally, management which is capable of exercising the highest responsibilities. I welcome what my hon. Friend said about mobility within the nationalised industries, and I note that he was misinterpreted when he accepted the desirability of mobility with private enterprise below the top level. We all hope that this long-term process of increasing the supply of top management ability in the country will produce a market situation different from that which we have today. But this is a long-term consideration.
We accept that the steel industry is in some senses in a special position in that it is, for example, a manufacturing industry and it competes with overseas industries. But we cannot accept the implication which was, I think, at the back of the mind of the hon. Member for Aylesbury (Sir S. Summers), that in some sense the steel industry needs first-class management whereas, for example, the electricity supply industry—which has a far bigger investment load than any other industry in the country—can somehow do with less than first-class management at the top.

Sir Harmar Nicholls: He did not say that.

Dr. Bray: The hon. Member for Aylesbury came near to saying it when he suggested that the steel industry, because it is a manufacturing industry and is in direct competition with overseas industries should somehow have a particularly high calibre of management.

Sir Harmar Nicholls: I thought that what my hon. Friend was saying was perfectly clear.

Sir S. Summers: Perhaps I had better make my own point. The Parliamentary Secretary is quite wrong in saying that anything I said suggested that the other nationalised industry hoards should make do with lower quality at the top. The point I brought out was that, because of the special situation of the steel industry, it could not afford to have anything less than the best.

Dr. Bray: That is just as true for the members of the Electricity Council. They cannot have anything less than the best either. I am grateful to the hon. Gentleman for clearing up what I am sure he would not have wished to be taken as a reflection on the members of the boards or the activities of other nationalised industries.
We have been asked about the position of existing workers in the industry, some of them executive directors of companies, and what their position will be under nationalisation. I should make clear that the present working directors and staffs will, after vesting, while they remain in their existing jobs, continue to receive the salaries to which they are entitled under their contracts of employment.
Therefore, there will be no across-the-board reduction in the salaries of the men now working in the steel industry. Nor will men necessarily go on for ever holding the jobs they now have. Every industry, when it is reorganised, must move staff around and not all staff are able to retain the same levels of responsibility they held before. As my hon. Friend the Member for Rotherham (Mr. O'Malley) said, there are many directors on the vesting companies. But any staff who, as a result of the reorganisation of the industry, suffer a forced diminution in emolument will be entitled to compensation under regulations the Minister is required to make under Section 41 of the 1949 Act, revived, and these will be based on the same general principles as comparable regulations made under other nationalisation measures. There will, therefore, certainly be the justice which the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) was concerned should be evident.
Another factor in the Government's decision relating to the salaries of the Corporation is necessarily the effect on salaries in the middle ranges of management. With a vaguely technical background, I sometimes get very impatient when hon. Gentlemen opposite rest an argument for a salary increase to the top brass of industry on the brain drain of scientists and engineers. Top brass do not by and large have a ready demand for their services overseas, whereas more junior managers, scientists and engineers are in such high demand. That argument is tantamount to the one they sometimes use to persuade old-age pensioners


to vote for a reduction in Income Tax because of the shilling tax they may put on their private superannuation scheme.

Mr. Peyton: That is one of the flabbiest arguments that I have yet heard from the Parliamentary Secretary.

Dr. Bray: I hope that the hon. Member for Yeovil (Mr. Peyton) will elaborate his view of the brain drain on some future occasion, and not base it on any arguments about the top levels of industry. Clearing out some of the people who are at present holding £20,000 a year jobs in the private sector would probably be one of the most effective ways of stopping the brain drain. [Interruption.] The hon. Gentleman may like a private discussion on that in the Lobby later. I am sure that he could name as many people as I.
The salaries at the top will affect those in the middle levels of industry directly —and that will be an important consideration but it will indirectly have a much wider effect on the Government's incomes policy as a whole. That point was made by my hon. Friend the Member for Ashfield (Mr. Marquand).
An Amendment which simply puts one consideration, however relevant, and none of the others, relating to the structure of management below the top and the effect on the incomes policy, could not possibly be accepted. I agree that the question is not easy, and I hope that the House will give as close attention as this to other matters affecting the industry. We shall secure the services of a first-class Corporation but we cannot solve the problems of the whole national structure of salaries and incomes in the context of its salaries. The appointments which my right hon. Friend must make must be made in the light of all the considerations. They cannot be made under the one-sided provisoes of the Amendment.
I therefore hope that the House will reject it.

Mr. O'Malley: Before my hon. Friend sits down I should like to ask him about what he said about the executive directors, in that while they kept their present jobs they would keep their present salaries. Would he not agree that if those salaries are substantially in excess of the salaries received by members of

the board, as would be the case if they received similar salaries to those of members of the boards of the existing nationalised industries, an impossible situation would be created?

Dr. Bray: That is the kind of situation we should discuss when it arises.

Mr. Patrick Jenkin: I entirely accept the right hon. Gentleman's reason for not seeing fit to reply to the debate himself. He told us that he had an important meeting which would have prevented him from hearing the arguments. At the same time, the debate has shown that there is great interest in the House, and comments in the Press have shown that the subject is of much wider public interest, and I believe that on this occasion the Minister should have put Parliament first. In the light of the reply of the Parliamentary Secretary to the Ministry of Technology, as a result of which we are none the wiser, the Minister was guilty—I do not say of discourtesy to the House—but perhaps of a misjudgment in not dealing with the matter himself.
The debate has been most interesting, because it is clear that the Amendment has touched the Labour Party on a sensitive and raw spot. We have seen in all its nakedness the schizophrenia which affects right hon. and hon. Gentlemen opposite when discussing issues of this sort. On the one hand, the hon. Members for Rotherham (Mr. O'Malley) and Cleveland (Mr. Tinn) and another hon. Member insisted that the right criterion was the rate for the job, and regarded the efficiency and prosperity of the steel industry as the over-riding criterion. They demanded that the Minister should pay the kind of salaries which would achieve that objective.
On the other hand, there were hon. Members like the hon. Member for Lewisham, West (Mr. Dickens) and Deanne Valley (Mr. Edwin Wainwright) and Glasgow, Provan (Mr. Hugh D. Brown) who utterly rejected that, and took the view that what was necessary was a fulfilment of the doctrines of Socialism, and human nature jolly well had to fit in. That was what the hon. Member for Dearne Valley was saying.
The fact is that the salary a man gets is a subject of absorbing interest, and it has always been the view in the public service that the public has a right to


know what is being paid. It therefore follows that when we set up a new public corporation with new functions which are different from any that have gone before, the level of remuneration to be paid to its members must be regarded as a very important clue to the Minister's intentions as to how it is to be run. The House has obviously so regarded it. The nature of the job, the level of competence required, and, in this case, the fact that the Corporation must operate in the overseas as well as the home market, are all important factors. As is usual in these matters, the Bill is silent on this, and the Amendment was intended to dig out the Government's intentions in this important regard.
We all knew that Lord Melchett had been appointed Chairman of the Organising Committee with a salary of £16,000 a year; it was announced in a Written Answer. That salary was closely comparable with the salary being paid to Sir Giles Guthrie, Chairman of B.O.A.C. But that fact does not begin to answer the question of the level of remuneration of the members of the Corporation once it is in existence. The Minister refused to answer that question in Committee, and my hon. Friends and I felt it right to return to the attack on Report.
It has now become clear that in bringing forward the Bill and raising this dilemma the Minister and the whole Government have stirred up a veritable hornets' nest. The dilemma is obvious and has been pinpointed not only in the Sunday Express but in other responsible newspapers. Out of the full-time members of public boards at present being remunerated by the nation, only 13 are in the five-figure bracket, earning more than £10,000 a year. All the rest earn less. In the Civil Service the figures tend to be lower still. On the other hand, in private industry the salaries are very substantially higher.
A number of my hon. Friends referred to figures. The survey that I have drawn on for this purpose is one conducted by a very eminent management consultant who worked out the average full-time director's salary—not the chairman's salary, not the top salary—in a number of our leading companies. The figures will bear repetition in the context of this debate. I.C.I., £32,000; British Petroleum—in which the Government have at present 50 per cent. Shareholding—

£30,000; British Oxygen, £26,000; Shell, £25,000; Bowaters, £22,000; British Insulated Callenders Cables, £20,000; Guest Keen and Nettlefolds, £19,000; Vickers, £18,000. One could go on.
7.0 p.m.
I take the hon. Gentleman's point that all this makes it difficult to determine what the standard is, but the purpose of the Amendment is clear. It is, of course, that salaries comparable with those I listed need to be paid to members of the Corporation. There is a yawning gap between the level of remuneration paid to top industrialists and the level paid in the public sector, yet we want top industrialists for the new Corporation.
The Government have had to face this problem before. When the last Government hired Lord Beeching, they paid him what was admittedly an exceptional salary in order to retain his service. They agreed to pay him what he got at I.C.I. —£24,000. But this was exceptional and was seen to be. His successor is getting just over half that figure.

Mr. Dickens: Is it being seriously argued that Sir Stanley Raymond, because he is getting £12,500 per annum, is in any sense an inferior chairman to Lord Beeching, who was getting almost double?

Mr. Jenkin: I am not saying for one moment that Sir Stanley is doing worse than Lord Beeching did. My case is that these are the sort of considerations which young men take into account. They can see that the top man of British Railways is getting half or less than half of the salary of the top men in many of our major industrial concerns. That must have some effect on choice of career. Furthermore, in the case of the railways, I remind the hon. Member that, if a man wants to join the railways in Britain, there is but one employer. Such a situation will also nearly arise in steel.
I come to a more recent case where the Government have had to face the issue and where a thoroughly unsatisfactory situation has arisen. This is the employment of Mr. Wall as Director-General of the Post Office at a salary paid from public funds of £12,500, which is comparable with salaries paid in other nationalised industries. But his former employers—one of the main suppliers to the Post Office—are being left to make


up the difference in his salary, which is of an unspecified amount. This is fudging the issue. It is complete nonsense and must be regarded as a totally unsatisfactory solution.
Now, with the new Corporation, the issue has to be faced. I am bound to tell the Joint Parliamentary Secretary to the Ministry of Technology that nothing he has told us has given us any clue as to how the Minister intends to deal with this case. Of course, the right hon. Gentleman is facing difficulties from his colleagues. Many Departments, including the Treasury and the D.E.A., and possibly civil servants and fulltime members of other corporations, are going to object if the right hon. Gentleman finds that he has to pay salaries substantially in excess of those paid to members of existing boards in building up the right career structure in the steel industry. That is what the political correspondent of The Times called a "political quandary". It is the position in which the Government find themselves.
We are now in almost the last stage of the Bill. We are still no nearer than we were on Second Reading to knowing what the Minister intends to do about this. Perhaps there are goods reasons for the Treasury's fears in this matter. Last Thursday The Guardian published an article on the subject of salaries in the public and private sectors, indicating that the right answer—and I recognise that this would be no comfort to the hon. Member for Lewisham, West (Mr. Dickens)—is that the Government must upgrade the level of salaries being paid to top level posts in the public sector if they are to compete for the best available talent.
It is time that this internal argument was finished. It began even before the Committee Stage of the Bill—even before the right hon. Gentleman appointed Lord Melchett to be Chairman of the Organising Committee. On 13th September, only five months ago, the industrial correspondent of the Financial Times wrote in an article:
The search for a chairman from either inside or outside the industry has apparently not yet been finally concluded and yesterday's consultations"—
between the Minister of Power and the Secretary of State for Economic Affairs—

appeared to centre on the size of salary and conditions.
In September, the right hon. Gentleman was arguing about this. In November he was pressed in Committee to tell us his position. Now, two months later, we have still had no answer.
We unequivocally take our stand that the Government must pay the market rate. Not only will this attract the right people at the outset but, far more important, it will establish a career structure from top to bottom which will ensure that the Corporation will get its share of the available talent coming from the universities, technical colleges and elsewhere.
When the Joint Parliamentary Secretary jibed at my hon. Friends about their reliance on the brain drain in argument, he was doing less than justice to his case, because it is these people who, if they want a career in steel, will compare opportunities here with those overseas. They will see that the level of remuneration of those at the top here, with the inevitable sandwiching of the structure, will not give them the opportunities they think their abilities entitle them to and they will go. That is a factor that the hon. Gentleman must bear in mind.
This is a difficult problem but the right hon. Gentleman owes it to Parliament to say what is in his mind. He has manifestly failed to do so despite opportunities in Committee and again today. For this reason, the reply of the hon. Gentleman was totally unsatisfactory and I advise my right hon. and hon Friends to vote in favour of the Amendment.

Mr. Lubbock: I agree with the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) that the answer given by the Joint Parliamentary Secretary to the Ministry of Technology told us absolutely nothing. For that reason alone, the Opposition would be justified in dividing on the Amendment. But, as the Minister of Power himself has been here for the last half hour and has listened carefully to what has been said in that time, he might do us the courtesy of saying a few words about what is in his mind before the debate concludes.
As the Joint Parliamentary Secretary said, we should get on to other Amendments covering greater numbers of people but although I agree in theory I must point out that, unless we get the right


people on the Corporation, the jobs of all those who work in the industry will be less satisfactorily taken care of and so we are not only arguing about the salaries of the few men at the top but about the guidance they are to give the industry as a whole and about the importance that the industry will have to our economy.
From that point of view alone, the time we have spent on the Amendment is fully justified. It is clear that on both sides we agree that the best men should be appointed. The only dispute is on the level of remuneration required in order to get the best men. If a man is receiving £24,000 a year in private industry, it is unlikely that he will go to the Corporation for one-third of that sum. We have heard about the incidence of taxation, which means that, if a person gets a few thousand £s extra in this sort of range, it does not make a great deal of difference to his take-home pay. But there is a big enough difference between £8,000 and £24,000 to deter a person receiving the latter from going to the N.S.C. and receiving the former. The case of Dr. Beeching has been quoted several times. It was necessary to pay him the same remuneration he was receiving from I.C.I. to get him to take on the job—[HON. MEMBERS: "Less."] £2,000 less, I think. Nevertheless, it was substantially in excess of the salaries which were currently payable to chairmen of the nationalised industries.
I think myself that there is a case for a general review of the remuneration of the chairmen of all the nationalised industries. It would be out of order to discuss that on this occasion since we are talking about only the National Steel Corporation. I do not think there should be a norm, a sort of Civil Service level, of remuneration for the directors and chairmen of our nationalised industries, but that they should be paid what it is necessary to pay them in order to get the best men for the job whether for the Central Electricity Generating Board, the National Coal Board or the National Steel Corporation.

Mr. E. Shinwell: Could they not be paid by results? Take, for example, Dr. Beeching. What did he achieve? He only achieved for his £24,000 the closing down of branch lines.

Anybody could have done that for less money. What has Lord Robens achieved for his £12,500 and, probably, perquisites? What has he achieved? He has closed down hundreds of pits and dispossessed thousands and thousands of miners. Anybody could do that for much less money.

Mr. Lubbock: I am sure, Mr. Speaker, you would not allow me to reply to that in detail. I would only say that Lord Robens has achieved a much higher rise in productivity in the coal industry than that in practically any other industry in the whole of this country. I do not think the right hon. Gentleman's remarks are very fair. Lord Robens has done a considerable amount to modernise the industry since he took over as Chairman of the Coal Board. There is a far higher proportion of coal produced by mechanical means, and automation is being introduced. Although, as the right hon. Gentleman says, there has been a reduction in the labour force in the industry, that would have been necessary under whoever was Chairman, whether Lord Robens or somebody else.

Mr. Dickens: rose—

Mr. Speaker: Order. Before the intervention, may I remind the House that we must keep to the Amendment.

Mr. Lubbock: I am sorry, Mr. Speaker, if I went too far in replying to that intervention by the right hon. Gentleman, but I think that the right hon. Gentleman might address himself to the question one of these days whether we pay the chairmen of our nationalised industries what they are worth. In the case of the National Steel Corporation, the job is of extreme importance to the national economy. I would suggest it would be of as great importance, at least, as that of the National Coal Board or the Central Electricity Generating Board, and I have already said that, in my opinion, the chairmen of those bodies are not getting the proper salary they should be paid.
The Minister has, in answer to a Question, given the salary which is being paid to Lord Melchett—and I think also that to Mr. Macdiarmid—as Chairman of the Organising Committee.

Mr. Marsh: May I just correct the hon. Gentleman? No salary is being paid to Mr. Macdiarmid.

Mr. Lubbock: The salary being paid to Lord Melchett, as Chairman of the Organising Committee, is £16,000. I think it would be of great interest to the House if the Minister could say whether that is the salary he has in mind for the Chairman of the Corporation, when he has subsequently been appointed. I would have thought that the job of Chairman of the Organising Committee was not such a well-paid one as the job of the Chairman of the Corporation, when the Minister has appointed one, and I think that Lord Melchett may well expect a rise. If the Minister could tell us, it would be of great importance, as indicating the sort of range of salaries the directors of the Corporation are likely to be paid, whether they will be of the same order as those in other nationalised industries or whether, if the Chairman is getting more, the directors will be receiving more than they are.
I would suggest that the Minister, having listened for at least three-quarters of an hour to this discussion and to the

whole of the speech of the Parliamentary Secretary, might realise that there is some disquiet in the House on this subject, and that he might avoid a Division and get on with his Bill much faster if he would vouchsafe at least some information to the House of what is in his mind. If he would look at Section 1(9) of the Act of 1949, to which the Amendment refers, he will see that all that it tells us is that those persons will receive such
remuneration…as the Minister may, with the approval of the Treasury, determine".
That means that the whole thing is completely in the air. No one in this House will have the slightest idea what remuneration those directors will receive, and if that is to be the position at the end of this debate the Opposition are perfectly justified in dividing on this Amendment.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 212, Noes 257.

Division No. 240.]
AYES
[7.15 p.m.


Alison, Michael (Barkston Ash)
Cunningham, Sir Knox
Heath, Rt. Hn. Edward


Allason, James (Hemel Hempstead)
Currie, G. B. H.
Heseltine, Michael


Astor, John
Dalkeith, Earl of
Higgins, Terence L.


Atkins, Humphrey (M't'n &amp; M'd'n)
Dance, James
Hill, J. E. B.


Awdry, Daniel
d'Avigdor-Goldsmid, Sir Henry
Hirst, Geoffrey


Baker, W. H. K.
Dean, Paul (Somerset, N.)
Hobson, Rt. Hn. Sir John


Barber, Rt. Hn. Anthony
Deedes, Rt. Hn. W. F. (Ashford)
Hogg, Rt. Hn. Quintin


Batsford, Brian
Digby, Simon Wingfield
Holland, Philip


Beamish, Col. Sir Tufton
Doughty, Charles
Hooson, Emlyn


Bell, Ronald
Drayson, G. B.
Hordern, Peter


Bennett, Dr. Reginald (Cos. &amp; Fhm)
du Cann, Rt. Hn. Edward
Hornby, Richard


Berry, Hn. Anthony
Eden, Sir John
Howell, David (Guildford)


Bessell, Peter
Elliot, Capt. Walter (Carshalton)
Hunt, John


Biffen, John
Elliott, R. W.(N'c'tIe-upon-Tyne, N.)
Hutchison, Michael Clark


Biggs-Davison, John
Eyre, Reginald
Iremonger, T. L.


Birch, Rt. Hn. Nigel
Farr, John
Irvine, Bryant Godman (Rye)


Blaker, Peter
Fisher, Nigel
Jenkin, Patrick (Woodford)


Body, Richard
Fletcher-Cooke, Charles
Johnson Smith, G. (E. Grinstead)


Bossom, Sir Clive
Forrest, George
Jones, Arthur (Northants, S.)


Boyd-Carpenter, Rt. Hn. John
Fortescue, Tim
Jopling, Michael


Boyle, Rt. Hn. Sir Edward
Foster, Sir John
Joseph, Rt. Hn. Sir Keith


Braine, Bernard
Galbraith, Hn. T. G.
Kerby, Capt. Henry


Brinton, Sir Tatton
Giles, Rear-Adm. Morgan
Kimball, Marcus


Brown, Sir Edward (Bath)
Gilmour, Ian (Norfolk, C.)
King, Evelyn (Dorset, S.)


Bruce-Gardyne, J.
Gilmour, Sir John (Fife, E.)
Kitson, Timothy


Bryan, Paul
Glover, Sir Douglas
Knight, Mrs. Jill


Buchanan-Smith, Alick (Angus, N&amp;M)
Glyn, Sir Richard
Lambton, Viscount


Bullus, Sir Eric
Godber, Rt. Hn. J. B.
Lancaster, Col. C. G.


Burden, F. A.
Goodhart, Philip
Langford-Holt, Sir John


Campbell, Gordon
Gower, Raymond
Legge-Bourke, Sir Harry


Carr, Rt. Hn. Robert
Grant-Ferris, R.
Lewis, Kenneth (Rutland)


Cary, Sir Robert
Gresham Cooke, R.
Lloyd, Ian (P'tsm'th, Langstone)


Channon, H. P. G.
Grieve, Percy
Lloyd, Rt. Hn. Selwyn (Wirral)


Chichester-Clark, R.
Griffiths, Eldon (Bury St. Edmunds)
Longden, Gilbert


Clark, Henry
Gurden, Harold
Loveys, W. H.


Clegg, Walter
Hall, John (Wycombe)
Lubbock, Eric


Cooke, Robert
Hall-Davis, A. G. F.
McAdden, Sir Stephen


Cooper-Key, Sir Neill
Hamilton, Michael (Salisbury)
MacArthur, Ian


Cordle, John
Harris, Frederic (Croydon, N. W.)
Maclean, Sir Fitzroy


Costain, A. P.
Harris, Reader (Heston)
Macmillan, Maurice (Farnham)


Craddock, Sir Beresford (Spelthorne)
Harrison, Col. Sir Harwood (Eye)
Maddan, Martin


Crawley, Aidan
Hastings, Stephen
Maginnis, John E.


Crouch, David
Hawkins, Paul
Marples, Rt. Hn. Ernest


Crowder, F. P.
Heald, Rt. Hn. Sir Lionel
Marten, Neil




Maude, Angus
Percival, Ian
Teeling, Sir William


Maudling, Rt. Hn. Reginald
Peyton, John
Temple, John M.


Mawby, Ray
Pink, R. Bonner
Thatcher, Mrs. Margaret


Maxwell-Hyslop, R. J.
Powell, Rt. Hn. J. Enoch
Tilney, John


Mills, Peter (Torrington)
Price, David (Eastleigh)
Turton, Rt. Hn. R. H.


Mills, Stratton (Belfast, N.)
Prior, J. M. L.
van Straubenzee, W. R.


Miscampbell, Norman
Quennell, Miss J. M.
Vaughan-Morgan, Rt. Hn. Sir John


Mitchell, David (Basingstoke)
Ramsden, Rt. Hn. James
Vickers, Dame Joan


Monro, Hector
Rawlinson, Rt. Hn. Sir Peter
Walker, Peter (Worcester)


More, Jasper
Rees-Davies, W. R.
Walker-Smith, Rt. Hn. Sir Derek


Morgan, Geraint (Denbigh)
Renton, Rt. Hn. Sir David
Wall, Patrick


Morrison, Charles (Devizes)
Ridley, Hn. Nicholas
Walters, Dennis


Mott-Radclyffe, Sir Charles
Ridsdale, Julian
Ward, Dame Irene


Munro-Lucas-Tooth, Sir Hugh
Rodgers, Sir John (Sevenoaks)
Weatherill, Bernard


Murton, Oscar
Rossi, Hugh (Hornsey)
Wells, John (Maidstone)


Neave, Airey
Royle, Anthony
Whitelaw, Rt. Hn. William


Nicholls, Sir Harmar
Scott, Nicholas
Wills, Sir Gerald (Bridgwater)


Noble, Rt. Hn. Michael
Sharples, Richard
Wilson, Geoffrey (Truro)


Nott, John
Shaw, Michael (Sc'b'gh &amp; Whitby)
Wolrige-Gordon, Patrick


Onslow, Cranley
Sinclair, Sir George
Wood, Rt. Hn. Richard


Orr, Capt. L. P. S.
Smith, John
Woodnutt, Mark


Orr-Ewing, Sir Ian
Stainton, Keith
Worsley, Marcus


Osborn, John (Hallam
Steel, David (Roxburgh)
Wylie, N. R.


Osborne, Sir Cyril (Louth)
Stodart, Anthony
Younger, Hn. George


Page, Graham (Crosby)
Summers, Sir Spencer



Page, John (Harrow, W.)
Taylor, Sir Charles (Eastbourne)
TELLERS FOR THE AYES:


Pardoe, John
Taylor, Edward M. (G'gow, Cathcart)
Mr. Francis Pym and


Pearson, Sir Frank (Clitheroe)
Taylor, Frank (Moss Side)
Mr. Anthony Grant.




NOES


Abse, Leo
Davies, G. Elfed (Rhondda, E.)
Howell, Denis (Small Heath)


Albu, Austen
Davies, Harold (Leek)
Howie, W.


Allaun, Frank (Salford, E.)
Davies, Ifor (Gower)
Hughes, Rt. Hn. Cledwyn (Anglesey)


Alldritt, Walter
Delargy, Hugh
Hughes, Hector (Aberdeen, N.)


Allen, Scholefield
Dell, Edmund
Hughes, Roy (Newport)


Anderson, Donald
Dewar, Donald
Hunter, Adam


Archer, Peter
Diamond, Rt. Hn. John
Hynd, John


Armstrong, Ernest
Dickens, James
Jackson, Peter M. (High Peak)


Atkins, Ronald (Preston, N.)
Dobson, Ray
Jenkins, Hugh (Putney)


Atkinson, Norman (Tottenham)
Doig, Peter
Jenkins, Rt. Hn. Roy (Stechford)


Bagier, Gordon A. T.
Driberg, Tom
Johnson, Carol (Lewisham, S.)


Barnett, Joel
Dunn, James A.
Jones, Dan (Burnley)


Beaney, Alan
Dunnett, Jack
Jones, J. Idwal (Wrexham)


Bellenger, Rt. Hn. F. J.
Dunwoody, Mrs. Gwyneth (Exeter)
Judd, Frank


Bence, Cyril
Dunwoody, Dr. John (F'th &amp; C'b'e)
Kelley, Richard


Benn, Rt. Hn. Anthony Wedgwood
Eadie, Alex
Kerr, Dr. David (W'worth, Central)


Bennett, James (G'gow, Bridgeton)
Edwards, William (Merioneth)
Lawson, George


Bidwell, Sydney
Ellis, John
Leadbitter, Ted


Bishop, E. S.
English, Michael
Lee, Rt. Hn. Frederick (Newton)


Blackburn, F.
Ennals, David
Lestor, Miss Joan


Boardman, H.
Ensor, David
Lever, L. M. (Ardwick)


Booth, Albert
Fernyhough, E.
Lewis, Ron (Carlisle)


Boston, Terence
Finch, Harold
Lomas, Kenneth


Bottomley, Rt. Hn. Arthur
Fletcher, Raymond (Ilkeston)
Loughlin, Charles


Bowden, Rt. Hn. Herbert
Fletcher, Ted (Darlington)
Luard, Evan


Boyden, James
Foot, Michael (Ebbw Vale)
Lyon, Alexander W. (York)


Braddock, Mrs. E. M.
Ford, Ben
Lyons, Edward (Bradford, E.)


Bradley, Tom
Fraser, John (Norwood)
McBride, Neil


Bray, Dr. Jeremy
Freeson, Reginald
McCann, John


Brooks, Edwin
Gardner, Tony
MacColl, James


Broughton, Dr. A. D. D.
Garrett, W. E.
MacDermot, Niall


Brown, Hugh D. (G'gow, Provan)
Ginsburg, David
Macdonald, A. H.


Brown, Bob (N'c'tle-upon-Tyne, W.)
Gourlay, Harry
McKay, Mrs. Margaret


Buchan, Norman
Gray, Dr. Hugh (Yarmouth)
Mackenzie, Gregor (Rutherglen)


Buchanan, Richard (G'gow, Sp'burn)
Gregory, Arnold
Mackie, John


Butler, Herbert (Hackney, C.)
Griffiths, David (Rother Valley)
Mackintosh, John P.


Carmichael, Neil
Griffiths, Rt. Hn. James (Llanelly)
Maclennan, Robert


Carter-Jones, Lewis
Griffiths, Will (Exchange)
McMillan, Tom (Glasgow, C.)


Castle, Rt. Hn. Barbara
Hale, Leslie (Oldham, W.)
McNamara, J. Kevin


Coe, Denis
Hamilton, James (Bothwell)
MacPherson, Malcolm


Coleman, Donald
Harper, Joseph
Mahon, Peter (Preston, S.)


Concannon, J. D.
Harrison, Walter (Wakefield)
Mahon, Simon (Bootle)


Conlan, Bernard
Hart, Mrs. Judith
Mallalieu, E. L. (Brigg)


Corbet, Mrs. Freda
Haseldine, Norman
Mallalieu, J. P.W.(Huddersfield, E.)


Craddock, George (Bradford, S.)
Hattersley, Roy
Manuel, Archie


Crawshaw, Richard
Hazell, Bert
Mapp, Charles


Cronin, John
Henig, Stanley
Marquand, David


Crosland, Rt. Hn. Anthony
Herbison, Rt. Hn. Margaret
Marsh, Rt. Hn. Richard


Crossman, Rt. Hn. Richard
Hobden, Dennis (Brighton, K'town)
Mason, Roy


Cullen, Mrs. Alice
Hooley, Frank
Mayhew, Christopher


Dalyell, Tam
Horner, John
Mellish, Robert


Davidson, Arthur (Accrington)
Houghton, Rt. Hn. Douglas
Mendelson, J. J.


Davies, Dr. Ernest (Stretford)
Howarth, Harry (Wellingborough)
Mikardo, Ian







Millan, Bruce
Price, William (Rugby)
Swingler, Stephen


Milne, Edward (Blyth)
Pursey, Cmdr. Harry
Symonds, J. B.


Mitchell, R. C. (S'th'pton, Test)
Randall, Harry
Taverne, Dick


Moonman, Eric
Rankin, John
Thomas, George (Cardiff, W.)


Morris, Alfred (Wythenshawe)
Redhead, Edward
Thornton, Ernest


Morris, Charles R. (Openshaw)
Roberts, Albert (Normanton)
Tinn, James


Morris, John (Aberavon)
Roberts, Goronwy (Caernarvon)
Tomney, Frank


Moyle, Roland
Roberts, Gwilym (Bedfordshire, S.)
Urwin, T. W.


Murray, Albert
Robertson, John (Paisley)
Varley, Eric C.


Newens, Stan
Robinson, Rt. Hn. Kenneth (St. P'c'as)
Wainwright, Edwin (Dearne Valley)


Norwood, Christopher
Robinson, W. O. J. (Walth'stow, E.)
Wallace, George


Oakes, Gordon
Rodgers, William (Stockton)
Watkins, David (Consett)


Ogden, Eric
Roebuck, Roy
Weitzman, David


O'Malley, Brian
Rogers, George (Kensington, N.)
Wellbeloved, James


Oram, Albert E.
Rose, Paul
Wells, William (Walsall, N.)


Orbach, Maurice
Ross, Rt. Hn. William
Whitaker, Ben


Orme, Stanley
Rowland, Christopher (Meriden)
White, Mrs. Eirene


Oswald, Thomas
Ryan, John
Whitlock, William


Owen, Dr. David (Plymouth, S'tn)
Shaw, Arnold (Ilford, S.)
Willey, Rt. Hn. Frederick


Owen, Will (Morpeth)
Sheldon, Robert
Williams, Alan (Swansea, W.)


Paget, R. T.
Shinwell, Rt. Hn. E.
Williams, Alan Lee (Hornchurch)


Palmer, Arthur
Short, Rt. Hn. Edward (N'c'stle-u-Tyne)
Williams, Clifford (Abertillery)


Pannell, Rt. Hn. Charles
Short, Mrs. Renée (W'hampton, N. E.)
Williams, Mrs. Shirley (Hitchin)


Park, Trevor
Silkin, Rt. Hn. John (Deptford)
Willis, George (Edinburgh, E.)


Parker, John (Dagenham)
Silverman, Julius (Aston)
Wilson, William (Coventry, S.)


Parkyn, Brian (Bedford)
Silverman, Sydney (Nelson)
Winnick, David


Pavitt, Laurence
Skeffington, Arthur
Woodburn, Rt. Hn. A.


Pearson, Arthur (Pontypridd)
Slater, Joseph
Woof, Robert


Peart, Rt. Hn. Fred
Small, William
Yates, Victor


Pentland, Norman
Snow, Julian
Zilliacus, K.


Perry, Ernest G. (Battersea, S.)
Spriggs, Leslie



Perry, George H. (Nottingham, S.)
Steele, Thomas (Dunbartonshire, W.)
TELLERS FOR THE NOES:


Price, Christopher (Perry Barr)
Storehouse, John
Mr. Charles Grey


Price, Thomas (Westhoughton)
Strauss, Rt. Hn. G. R.
and Mr. Ioan L. Evans.

Mr. Peyton: I beg to move Amendment No. 11, in page 2, line 15, to leave out subsection (6).
I can say at the outset that there would probably be no Division on this Amendment if I were able to guarantee the conduct of either Parliamentary Secretary, but as both of them are inclined to lead with their chins I cannot give any guarantee that we will not have to divide after all.
The purpose of the Amendment—and for the life of me I cannot understand why I did not raise the matter in Standing Committee—is to make a mild inquiry about what the "special circumstances" are likely to be. Secondly, is this a normal provision in an Act of Parliament? Thirdly, even if it is a normal provision, is it a proper one?
I do not like the idea of people who are removed from office by some force or other being thereafter paid compensation in accordance with a Minister's inclination subject to the fiat of the Treasury. This seems to me to be an unusual state of affairs. It may be that the Parliamentary Secretary can inform me that it applies in every comparable Act of Parliament. I hasten to say, however, that that would not increase my respect for it, but the argument of precedent is a tough one to have to meet.

Dr. Bray: No chins, and I hope that the hon. Member will be able shortly to go for his dinner—

Mr. Speaker: Order. I was not aware that the hon. Member for Yeovil (Mr. Peyton) had finished his speech.

Mr. Peyton: No, Mr. Speaker. I was under the impression that the Parliamentary Secretary sought to interrupt me. I have asked him those three questions and I am not in the least anxious to go for my dinner. The hon. Gentleman is an absolute master of the inelegant phrase. His tact is that which could be attributed to a rhinoceros, only with the fear that one might somehow offend the rhinoceros.

Mr. Michael Shaw: rose—

Mr. Speaker: I hope that there will be no interventions while the hon. Member is trying to get back into order.

Mr. Peyton: My earliest warning was justified when I said that in normal circumstances a Division on this issue was beyond contemplation. However, the Parliamentary Secretary is teetering on the edge of one more miracle.
I come straight back to the Amendment. My three questions to the hon. Gentleman are whether this is a normal provision; secondly, if it is normal, whether


it is proper; and thirdly, what are the special circumstances envisaged and what sort of sums of money the Minister has in mind to pay.

7.30 p.m.

Dr. Bray: No rhinoceroses either!
The hon. Gentleman asked three questions: first, when would this provision he used? There may be circumstances in which the Minister would decide that it would be in the interests of the Corporation—for example in order to provide for some reconstruction of the organisation of the Corporation itself at a later stage—that a member should resign although he was fit to continue in his function. In these circumstances, according to the terms of his appointment, it might not be possible for the Minister to terminate it. On the other hand, if the member simply resigned, without the provisions of this subsection it might not be possible to pay him compensation for resigning. It is, therefore, wholly proper that this provision should exist, and, indeed, it is necessary for the smooth working of the Corporation in future.
The hon. Gentleman then asked whether this was usual, and whether there were precedents for it. There are precedents; this has been a standard provision in recent legislation. It appears, for example, in such Acts passed by the previous Conservative Administration as the Transport Act, 1962, and the Electricity and Gas Act, 1963, and, as far as we can see, there is no reason why the Corporation should be treated differently in this respect.

Amendment negatived.

Clause 2.—(POWERS OF THE CORPORA- TION.)

Mr. Speaker: The next Amendment is No. 13, in page 2, line 41, at the end to insert:
Provided that the Minister shall not authorise or give his consent to the carrying on of any activities of a substantial nature which are not carried on by a publicly-owned company immediately before the passing of this Act otherwise than by order.
With it we are taking Amendment No. 14, in line 41 at the end to insert:
Provided that any consent or general authority given by the Minister under this subsection shall be subject to the approval

within three months of both Houses of Parliament by affirmative resolution.

Mr. Barber: I beg to move Amendment No. 13, at the end to insert:
Provided that the Minister shall not authorise or give his consent to the carrying on of any activities of a substantial nature which are not carried on by a publicly-owned company immediately before the passing of this Act otherwise than by order.
These two Amendments are of great importance—

Mr. Speaker: Am I right in thinking that both sides have no objection to these Amendments being taken together?

Mr. Barber: Yes, Mr. Speaker. I spoke to the Minister about this, and also to my hon. Friend the Member for Yeovil (Mr. Peyton), who told me that they have no objection.
These two Amendments are of great importance for private enterprise, and also, I think, of considerable constitutional significance. The effect of this Clause is to give the Government and the Corporation unlimited power to diversify the Corporation's activities, and to engage in any business of any kind whatsoever, manufacturing, commercial, or financial, whether in the United Kingdom, or anywhere else in the world. We have argued that this power is far too wide, and one consequence, from Parliament's point of view, is that never again will there be any need for a new nationalisation Act, because if this Clause is passed unamended a Labour Government will have unlimited power to engage in any industrial enterprise whatsoever.
When we had a long discussion about this in Committee, the Government rejected our contention, hence this Amendment, which has the simple purpose of providing that where the Corporation wishes to diversify and branch out into an industrial or commercial venture which has nothing to do with iron and steel activities, that new venture shall be subject to the approval of Parliament. We do not suggest that that approval should require the tedious procedure of an Act of Parliament, but merely a single Order which would give the House of Commons the opportunity of a single debate.
We still have much work to do on the Bill, and I therefore once again plead with the Minister, if I may put it bluntly, not to waste the time of the House on


the technicalities of the Amendment, because the point at issue is quite simply whether or not there should be some measure of Parliamentary control, or, at the very minimum, an opportunity of debate, if the Corporation engages in a substantially new industrial or commercial venture other than an activity concerned with iron and steel.
The Bill as drafted gives the Corporation power to carry on, without the slightest reference to Parliament, quite legitimately, hundreds of manufacturing and commercial activities which are wholly divorced from iron and steel making. To save time I shall give only a few examples of the areas of industry and commerce which this new nationalised body will be able to enter without even the knowledge of Parliament, let alone its approval.
My remarks are, of course, based on the memorandum of association referred to in, and made operative by, the Clause. There can therefore be no misunderstanding or dispute about the position.
There are two broad questions which I should like to put to the Minister. First, why should this new State agency have the power, for example, to go into the aircraft business, or into shipbulding, without further reference to Parliament? Why should it have power to run hotels, or to go into the building and civil engineering business without any reference to Parliament, or to start up in the motor car or commercial vehicle business? Why should it have power to start retail shops in competition with existing retailers, without any reference to Parliament?
If the right hon. Gentleman says in reply to those questions that the Government has no intention of doing all those things, then my answer is two-fold: first, the Government should not take these arbitrary and all-embracing powers without providing for Parliamentary control. Secondly, we on these benches no longer have the slightest confidence in assurances given by the Government. In saying this I accept that if the right hon. Gentleman gives his personal word, as long as he holds the office of Minister of Power he will keep it, but he cannot bind his successors. I could refer to innumerable statements which have been made

during the past year about prices and incomes policy, and other matters, which would show why I believe that we cannot put our trust in the statements of Government Ministers, but I do not want to go into those details now.
I do not rest my case only on the lack of confidence which we have in statements by the Government. The purpose of the Amendment is to curb the extension of the State into areas of industry and commerce outside the iron and steel industry. When I referred last week to the new Parliamentary Secretary's pledges to the electors of Willesden, East, he laughed. He seemed to be saying, "Who cares about election pledges now? We have the power, and I am the Minister", but when the hon. Gentleman wrote to his electors,
We reject the selfish greedy doctrines of capitalism.
I believe that he was being sincere, and I believe that he really meant it.
The truth—and this is what is behind the Amendment—is that despite the fact that we live in a predominantly private enterprise economy, the Labour Government do not believe in private enterprise, and that is why in this Bill, which purports to cover only iron and steel, they are slipping in these powers to engage in every conceivable industrial and commercial enterprise which is in no way connected with iron and steel. Obviously the right hon. Gentleman and his colleagues with their majority of 100 are bound to get this Clause. We cannot stop them. We realise that these powers are going to stay in the Bill, because this was made clear during the Committee stage, but why is the Minister so afraid of inserting some provision in the Bill —not necessarily these two Amendments —which will give Parliament the opportunity of debating all proposals by the Corporation to diversify? What is so wrong about asking that the House of Commons should have the opportunity to scrutinise proposals in entirely new industrial and commercial fields which are nothing to do with iron and steel or which are not now being carried on by the iron and steel industry? Why is the Minister so afraid of subjecting any new activities to the glare of Press publicity which follows from public debate?
He may say that the Corporation should be in no different position from that of a company operating in the private sector and should not therefore be subject to this sort of Parliamentary scrutiny, but there is all the difference in the world between a company in the private sector embarking upon an entirely new venture with a limited amount of risk capital subscribed by the shareholders and a nationalised industry spreading out into new manufacturing fields, with the bottomless purse of the Exchequer available to underwrite every faulty commercial judgment.
I have deliberately curtailed some of my observations. For all the reasons that I have given I hope that the Government will agree to some measure of Parliamentary scrutiny in relation to the cases that I have mentioned. Even if the right hon. Gentleman does not think it right that Parliament should have an opportunity to pray against these proposals I hope that he will at any rate undertake to give some thought to the introduction of a method whereby in every case, as of right, Parliament will be able to debate any substantial measure of diversification. If not, private enterprise will have every reason to fear the worst.

Mr. R. Gresham Cooke: Having been connected in various capacities with the formation of companies I can vouch for the fact that when a company is started the lawyers always draw the memorandum of association or charter of incorporation far more widely than the enterprises behind the company really want. They put in every kind of trade—iron and steel, brickmaking, engineering and the rest—in case, one day, 25 years hence, they may want it. Now the Government are adopting, in these memoranda of 14 companies, a very wide sphere of activities for their own purposes. While private enterprise runs a company its directors must have some regard to the amount of capital raised, and they know that they will not use nine-tenths of the opportunities provided by the memorandum of association. With the State capital-raising power behind it, however, the Corporation will be allowed, by Act of Parliament, to go into about 20, or 30 trades far removed from the iron and steel industry, and which on no account should be part of the Bill.

7.45 p.m.

Mr. Peyton: My right hon. Friend has put the case for the Amendment with the brevity and cogency that we have come to expect from him. I only wish that we could expect to receive the answer that it deserves. To give the Minister the sort of general authority envisaged in the Clause is quite wrong. It is wholly unjustifiable to issue a general authority to a Corporation financed from public funds and which thereafter is under no degree of Parliamentary or Ministerial control.
My right hon. Friend has been very modest in his proposal. Perhaps characteristically, my Amendment is, if anything, slightly more modest. All I say is that if any consent or general authority is given by the Minister under the Clause it should be notified to Parliament and subject to Parliamentary approval by affirmative Resolution within three months. That seems a very small thing to ask.
I was exceedingly disappointed at the attitude of the Minister in Committee. I hope that we shall not have a repetition of the strategy used by the Minister and his Parliamentary Secretary on that occasion, when they re-echoed the very plausible point that the Opposition would surely not be so unreasonable as to deny to a nationalised industry what they conceded to private enterprise as a matter of course. This argument has come out of the slot machine every time anyone put a penny anywhere near it. It was very boring. No amount of banging home the obvious factor to which my right hon. Friend has again made reference—namely, that it is one thing to give private industry wide powers which it may never want to use and quite another to confer those powers upon a publicly-owned industry—had any effect.
It is no satisfaction to my right hon. Friends and myself to be told by the Minister that all this is subject to constant Ministerial survey, control and the rest, because we do not have any confidence in the willingness or ability of Ministers to control these vast industries. We believe that they have set themselves a problem in the steel industry which they will find far more easy to pose than to solve.
I will quote an extract from the Committee proceedings to illustrate the sort


of argument that we have had to face, in case the Minister should be tempted to repeat it. No doubt the Chair would then wish to arrest him on a charge of tedious repetition.

Mr. Marsh: Does not the hon. Gentleman agree that it would be more suspect if a Minister gave different answers every time the subject was raised.

Mr. Peyton: I agree. It would be slightly suspect. On the other hand, until we reached the Committee stage of the Bill I was an optimist, and had always thought it possible even for Socialist Ministers to see the error of their ways and to come clean and amend them—to clothe themselves properly in a white sheet of repentance and to admit that they had been wrong and would do better. Nobody would have been more generous than my right hon. Friend in such circumstances. He would not have danced in any gleeful way, celebrating victory cheaply. He would have been the first, in a statesmanlike way, to accept it. He would have had more joy over one sinner who repented than the 99 behind the Minister.
In Committee the Minister said:
I will now return to one of my significant points. That is—exactly why do private companies diversify? I cannot see the logic of the argument which accepts that it is essential, not just reasonable, for private companies to have these powers and quite outrageous if nationalised companies in the same business have them. That seems to be very extraordinary.
My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), who has been such a tower of strength in our arguments, intervened to say, "Because of finance". The Minister found that point embarrassing and quite incapable of answer, and accordingly said,
I will come to finance in a moment."—[OFFICIAL REPORT, Standing Committee D, 10th November, 1966; c. 450.]
The whole question was then indecently buried. We do not wish to obstruct progress so I shall not do what I did in Committee and read out an extract from the memorandum of association of Dorman, Long and Company. Suffice it to say that it starts:
Founding, welding, brick and tile-making;
and a good deal later on ends with:
…waterworks, oil wells and pipelines, and ships and aeroplanes.

All these things are now to be within the province of the new steel industry, and are financed not by limited private capital, of the kind that Dorman Long had at its command but by the entire resources of the State. Although the Minister may find this a source of joviality I am bound to say that the prospect for this industry is one which intensifies our gloom.
I hope that it will not be necessary to divide on both of these Amendments, and that the Minister will accept one or the other. In the event of his rejecting mine and accepting my right hon. Friend's let me assure him that there will be no quarrel between us. I hope that my right hon. Friend, with his characteristic generosity, would be glad to see mine accepted.

Mr. Barber: I did not see the Amendment put down by my hon. Friend the Member for Yeovil (Mr. Peyton) until my own was on the Notice Paper. Having considered the two, I think that in certain respects his has advantages.

Mr. Peyton: I am obliged to my right hon. Friend who is, as always courteous. If only a little of his courtesy and generosity could rub off on the other side of the House and the Minister could grant us one of these Amendments, the House would know what is being done in its name and would know, above all, how national resources were being deployed.

Mr. John Nott: In his reply to the debate in Committee on the subject of diversification the Parliamentary Secretary said:
The powers to acquire are necessarily by market operation. Any move by the Corporation would be exactly analogous to any move by any private company in this field."—[OFFICIAL REPORT, Standing Committee D, 15th November, 1966; c. 508.]
Earlier the Minister also made the statement to which my hon. Friend the Member for Yeovil (Mr. Peyton) has referred, namely that the National Steel Corporation would not really be in any different position from a company operating in the private sector.
I find this statement so completely astonishing and inaccurate that I very much support this Amendment and the Amendment of my hon. Friend the Member for Yeovil, which I agree is better than that of my right hon. Friend in


the sense that it makes an affirmative Resolution necessary.
If a company in the private sector decides to diversify and buy another company what precisely happens? It goes along to its advisers, and they decide at what price this private company needs to make a bid in order to persuade the shareholders of the other company to accept. In deciding on the price that it is to pay for the other company it considers a whole host of matters. First, it considers what the income of the shareholders is in their present state, and what it will be after their company has been acquired. Secondly, it considers what sort of earnings cover there is for that income in the present state and what it will be after their company is acquired, and, thirdly, what the attributable asset position is in the present state and what it will be after the company is acquired.
It goes through all of these procedures and discusses them in order to decide whether it can afford to make a bid for the company. In doing so, the private sector company is under very severe restraints, because normally it wants to pay cash for the company it is buying. In deciding to pay cash it has obviously to borrow the money in the vast majority of cases, and in borrowing the money in the open market it has to show for that borrowing certain income and capital cover. The institutions and the people lending in the private sector go most carefully into how far that company has its borrowing covered by its existing earnings and capital.
Take the case of the public sector company. The National Coal Board for instance and its bid for Whittlesea Central Brick, a bid by a nationalised industry for a company in the private sector. Take the Transport Holding Group's bid for Tayforth, which was again a case of a nationalised company bidding for a private sector company. When the National Coal Board went to the Treasury to borrow money in order to make a bid for Whittlesea Central Brick it certainly was not under the restraint of capital and income cover which a company in the private sector would be. Indeed if the National Coal Board was under this restraint and had to maintain four times income cover and twice times capital cover for borrowing money from the Treasury it would never borrow again

because the National Coal Board does not make a profit. What the Treasury does in deciding whether to grant the money is to ask itself, "Is this a case where commercial considerations deem this a suitable opportunity for a bid?" The Treasury then reaches a decision, "Yes, there are commercial considerations which make it worth while for the National Coal Board to make this offer".

Mr. Marsh: I think that the hon. Gentleman is under a misapprehension. These Amendments are about carrying on activities, they are not about acquiring interests.

Mr. Nott: The Amendment reads:
Provided that the Minister shall not authorise or give his consent to the carrying on of any activities of a substantial nature which are not carried on by a publicly-owned company immediately before the passing of this Act.
I take that to mean that if Stewarts and Lloyds, to take one example, is not now making rubber gloves, and if it wishes to do so after it becomes nationalised, then according to the Amendment the Minister is required to lay an order before Parliament. Clearly, this is diversification, after nationalisation and may involve acquisition.
Reverting to the argument, basically the Treasury makes its judgment on whether to lend money to the Coal Board on predominantly commercial criteria and not on financial and economic considerations. It decides, "Yes, it is in the interests of the National Steel Corporation or the National Coal Board to make a bid for the company. It can diversify its activities for commercial reasons." The Coal Board or the National Steel Corporation is not under the financial restraint of capital and income cover on its borrowings which would be the case with a company bidding in the private sector. That is why I consider the position of a private sector company to be utterly different to that of a public sector company and that is why I regard the Minister's statement in Committee— and no doubt he will make it again tonight—that the Treasury follows certain financial disciplines, that he also has responsibilities towards Parliament for the activities of these companies—wholly unsatisfactory.
We all know that the National Coal Board or the Transport Holding Group or the Electricity Boards are not under


the same financial disciplines as are provided in the market. Perhaps I should, however, declare something of an interest in that the firm I worked for has advised nationalised industries on making bids in the private sector. I have seen this operate in practice.
We believe that this Amendment is vitally important because it will require diversification, where it occurs for the National Steel Corporation, to be fully examined by this House. I prefer my hon. Friend's Amendment because it will require an affirmative Order and we will all have an opportunity of debating it. We will be able to say whether we think financial and economic considerations have been taken fully into account in the diversification and we will not leave it entirely to the Minister's discretion or to the Treasury, for the Minister will be primarily motivated by commercial criteria, as soon as the National Steel Corporation becomes publicly owned.

8.0 p.m.

Mr. A. G. F. Hall-Davis: One of the aberrations that has survived with me long after entering this House is that I still, from time to time, think that when all of the arguments are absolutely unchallenged on one side of the case and appear to be conclusive, perhaps they will carry the day. From time to time I have put a point rather less forcibly than I might otherwise have done in the hope that this was the case and have been sadly disappointed. As I believe that I was the last Member on this side of the House to rise, I would at once bring my remarks to a close were I to receive a nod from the Parliamentary Secretary.
One of these Amendments should be accepted, for two or three very simple reasons. The right hon. Gentleman produced the phrase on Wednesday of "folk fear" among the private sector of industry. Like certain phrases at the moment, although perhaps not entirely accurate, it is graphic enough it serves to focus attention upon the situation. He went on to say that we would give what reassurance he could to put the fears of nationalised industry production in the private sector at rest as far as possible. I would go a little further than that.
We are engaged in discussing codes of good conduct in various institutions in national and private bodies. We have been brought back to this problem earlier in the day. I would suggest that one code of good conduct that this House might establish for itself, which might raise its standing in the eyes of the public, is that it should not pass open-ended legislation without declaring that fact and making it quite obvious. It should be a matter of professional pride for the House of Commons that when it passes a Bill it makes quite clear exactly what it is meant to do and that the general public knows this. If it is merely an enabling Bill this should be declared and it should be debated on these grounds. There is no doubt that it would be very easy for this Bill, unless it has some modest restraint, to become purely an enabling Bill.
That is a strong reason why the Minister should accept one of these Amendments. We should be doing a proper, tidy job, such as we have declared our intention of doing. Another point is that new activities in the first phase of the Iron and Steel Corporation's life are to be avoided like the plague. Times of change and reorganisation are times of very considerable stress and are probably the most difficult period in the life of any trading or manufacturing concern. It is easy to expand on a fairly level course, it is fatally easy sometimes to contract on a fairly level course. To reshuffle the steel industry whatever its ownership may be is a very delicate operation.
I am very unhappy about the Minister giving a general authority of apparently indefinite duration which can then be produced later on, perhaps to the Minister's own discomfiture, by those responsible for the conduct of the industry. There should not be a blanket authority given but some specific terms when activities of this sort are involved. This has a bearing on many of the points affecting the private sector. We are at a time of falling industrial investment. This is a fact of our economic life, whether we like it or not, and therefore anything we can do to create and hold confidence in the private sector is worth while.
As I said at the outset, all the arguments appear to be on one side in this discussion. I hope that logic will prevail,


although perhaps this will be the last time that I will take this view if I do not get an affirmative response from the Minister.

Mr. Marsh: I must inform the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) that I am the bearer of sad tidings, because the view of the Government towards the Amendment is the same as we have taken since the matter with which it is concerned was first raised. After all, this is a continuation of a debate which took place in Standing Committee D. Indeed, it is the same debate and hon. Gentlemen opposite have clear views on the subject. The right hon. Member for Altrincham and Sale (Mr. Barber) acknowledged this when he put his case clearly and briefly—briefly because this is not a subject on which it is necessary any longer to make long speeches.
The issues involved are clear and the difference between the two sides of the House is equally clear. Hon. Gentlemen opposite seem to be schizophrenic on this matter. Time and again they have claimed that this industry is different from other nationalised industries in that it is a manufacturing industry and that it must exist in a competitive world, both internally and externally. They have, therefore, said throughout that we must provide for the industry the maximum degree of common commercial practice consistent with the public ownership of the industry.
In large measure I accept that. However, when hon. Gentlemen opposite then think about this in different ways they proceed to treat the industry as if it were a potentially dangerous, almost hostile, creature in this commercial world, and they have worked out ways—sincerely, I have no doubt, because they have a different attitude than we have—of ensuring that it is kept under control.
I accept that any publicly-owned industry must, because public capital is involved in it and because of its size, be under a certain level of control. Nevertheless, to suggest, as the Amendment does, that this control should virtually represent a debate in Parliament whenever the industry wishes to undertake something different—something which a private company would regard as

normal commercial practice—would be to lay it open to a situation in which it would be constantly looking over its shoulder, worrying about how this or that would be treated in Parliament.
The diversification projects of the National Coal Board have been mentioned. These are regularly questioned in Parliament and it is right that they should be. But to create a situation in which the Corporation must virtually seek Parliamentary approval for its diversification activities would be placing the steel industry in a position which would have bad effects on the industry as a whole. The diversified activities now being carried out by companies are many and varied and it would be wrong to limit the Corporation to those which are now being undertaken. We must think of the future. I cannot believe that, for example, Dorman Long was consciously contemplating entering the aircraft industry. Clearly one cannot foresee all the possibilities. While Dorman Long might not wish to enter the aircraft industry as a major manufacturer, it might, for good commercial and technological development reasons, wish to build an aircraft or two; and so the firm would wish to cover itself for every eventuality.
8.15 p.m.
If the fear is that, because the articles of association are drawn so widely, this or any other Government—and this has nothing to do with individual Ministers—might wish to use the Measure as an enabling one in its widest sense, enabling it to nationalise the aircraft industry or whatever it might be without coming to Parliament, such a thing would mean that Parliamentary Government as we know it today would be at an end. In real political terms, neither party could do that.
That being so, we are not arguing about the Bill being used for such massive decisions of public ownership. The Government were elected following the General Election at which their policy to nationalise the steel industry figured clearly. The Labour Party stated at that time that it would take this action. But no Government would nationalise this, that or the other simply because they had a Measure and could,


by reference to interests which they might want to take over, use that Measure in that way.

Mr. Gresham Cooke: Nobody is suggesting that any Government would use this Measure to nationalise a whole industry. It is, however, being suggested that, because of these wide powers, they could set up a company to make, say, commercial vehicles and might even make parts of aircraft and thereby get into the aircraft industry.

Mr. Marsh: I accept that. I was expressing some extreme views which are held by certain hon. Gentlemen opposite. The hon. Gentleman makes the point that the Corporation might want power to move into a sphere of activity in which it is not operating at the moment. That may be so. That is true of any commercial undertaking. We are at present in a period of rapid economic and technological development. There are bound to be many new developments in the future, of which we can have no idea now. For example, Richard Thomas and Baldwins is now engaged in housing construction. Looking at that objectively, it might have seemed in the past that that would have been a dangerous development. Hon. Gentlemen opposite might have taken that point of view. However, that firm is engaged in housing construction simply because it is using it as a means of developing prefabricated steel houses. This development is, therefore, extremely important to the company and, like any other commercial organisation, it has moved into that sphere of activity as a method of research and development.
The Amendment would not prevent the Corporation from undertaking new activities, but it would ensure that, before such activities were embarked upon, the Minister would have to give his consent by Order. Such a thing does not apply to any other industry and hon. Gentlemen opposite cannot place an industry of this size in a situation in which every move it makes is automatically open to debate in Parliament. As I have said, the Minister is accountable to Parliament in this matter, as he is for diversified projects. The hon. Member for Worcestershire, South (Sir G. Nabarro) on many occasions in Committee raised the question of diversification.

Mr. Nott: The right hon. Gentleman might care to consider this analogy. If a company in the private sector wishes to diversify, its shareholders are always entitled to comment on the diversification by requesting an extraordinary general meeting. We are here talking about a public sector company. We are merely asking that Parliament, as the guardian of the public purse, should have the same opportunity as shareholders in the private sector have.

Mr. Marsh: I suggest that Parliament will have even more frequent and regular opportunities for doing that than the average shareholder in a large company. Without wishing to put ideas into the hon. Gentleman's head, if his right hon. Friends were to request a meeting of this House—perhaps by putting down a Motion of censure on the Minister—they would get a debate, particularly if a big issue were involved.
I recognise that any extension of the Corporation's activities could involve important considerations of the national interest. That is why, in Clause 2(1), the Corporation cannot go in for certain activities, apart from iron and steel, without the Minister's permission. It also recognises that Parliament should have an interest in any extension of the Corporation's interests and that ultimately any such extension should be subject to Parliamentary control. I, or the Minister of the day, is answerable to Parliament for any consent given under that provision and for the use made or not made of the general direction contained in Section 4(1) of the 1949 Act revived. This must be watched and I do not accept that the nationalised industries should have the right to diversify regardless of general and specific commercial interests. It is right that Ministers should be answerable to Parliament for the decisions of their Department.
The Government believe that the balance that will be created by the Bill is about right. It is framed in a way to reconcile the reasonable commercial freedom of the Corporation with the assertion of Parliamentary control. Parliament will be fully informed about the Corporation's activities and will be able to intervene when it considers that any extensions raise important issues.
I draw the attention of the House to New Causes 2 and 3, which contain specific powers to require the Corporation to publish full information both about its iron and steel and its diversified activities. In these circumstances, it would be a mistake, unfair and against the interests and commercial success of the Corporation to impose on it the sort of restrictions which hon. Gentlemen opposite wish to impose—restrictions which I believe are unnecessary and which would have damaging effects on the Corporation.

Mr. Barber: When the right hon. Gentleman intervened in the middle of one of my hon. Friend's speeches his intervention was very revealing indeed because he said, in effect, that when the same question is raised on Report as was previously raised in Committee, then all we can expect from him is the same answer. He seemed to think that this was the normal thing to happen. Of course the whole purpose of raising again briefly on Report matters which have been considered in Committee is because the right hon. Gentleman and his colleagues have had an opportunity in the meantime of considering whether or not they should change their minds. On one or two occasions they have repented.
I will not dwell on the Amendment because it is clear that the right hon. Gentleman does not propose to give way. He said that all he wants to do is to give to this public enterprise the same rights and opportunities as are given to private enterprises and that diversification in private enterprise is "normal commercial practice". But here we are not considering diversification within the steel industry. The Amendment is concerned solely with diversification right outside that industry and it is nonsense to say that this is normal practice in private enterprise. A considerable amount of diversification goes on, but when it takes place right outside the normal activities of a company, then it is a major consideration

which is subject to the most careful scrutiny.

The right hon. Gentleman said that we took the view that this nationalised industry was potentially dangerous. That is not so. It is the decisions of Socialist Ministers which we consider to be potentially dangerous. We know, from what the right hon. Gentleman said absolutely frankly to one of his hon. Friends in that momentous letter to which reference was made many times in Committee, that he will be minded, whenever he is requested by the Corporation, to give his consent to diversification.

The remarks of the right hon. Gentleman concerning the similarity between this Corporation and private enterprise were staggering. How could he say that, after listening to my hon. Friend the Member for St. Ives (Mr. Nott)? There is all the difference in the world between a company in the private sector diversifying outside its normal activities, having to consider raising risk capital and its duty to its shareholders, and a nationalised industry spreading into new manufacturing fields with the Exchequer behind it. It is the most abject nonsense of the right hon. Gentleman to pretend that they are on a par.

We all know the effect of this Clause. Its purpose is to give the National Steel Corporation unlimited power—I mean unlimited; there is no qualification—to diversify its activities into any business of any kind whatever. We believe there should be some measure of Parliamentary control. It is intolerable that the right hon. Gentleman will not go even thus far to meet us, if not to provide some measure of Parliamentary control at any rate some measure of Parliamentary scrutiny. If he is not prepared to do so, we are left with no alternative but to divide the House.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 211, Noes 256.

Division No. 241.]
AYES
[8.21 p.m.


Alison, Michael (Barkston Ash)
Bell, Ronald
Bossom, Sir Clive


Allason, James (Hemel Hempstead)
Bennett, Dr. Reginald (Gos. &amp; Fhm)
Boyd-Carpenter, Rt. Hn. John


Astor, John
Berry, Hn. Anthony
Boyle, Rt. Hn. Sir Edward


Atkins, Humphrey (M't'n &amp; M'd'n)
Bessell, Peter
Braine, Bernard


Awdry, Daniel
Biffen, John
Brinton, Sir Tatton


Baker, W. H. K.
Biggs-Davison, John
Brown, Sir Edward (Bath)


Barber, Rt. Hn. Anthony
Birch, Rt. Hn. Nigel
Bruce-Gardyne, J.


Batsford, Brian
Blaker, Peter
Bryan, Paul


Beamish, Col. Sir Tufton
Body, Richard
Buchanan-Smith, Alick (Angus, N&amp;M)




Bullus, Sir Eric
Hill, J. E. B.
Osborne, Sir Cyril (Louth)


Burden, F. A.
Hirst, Geoffrey
Page, Graham (Crosby)


Campbell, Gordon
Hobson, Rt. Hn. Sir John
Page, John (Harrow, W.)


Carr, Rt. Hn. Robert
Holland, Philip
Pearson, Sir Frank (Clitheroe)


Cary, Sir Robert
Hooson, Emlyn
Percival, Ian


Channon, H. P. G.
Hordern, Peter
Peyton, John


Chichester-Clark, R.
Hornby, Richard
Pink, R. Bonner


Clark, Henry
Howell, David (Guildford)
Powell, Rt. Hn. J. Enoch


Clegg, Walter
Hunt, John
Price, David (Eastleigh)


Cooke, Robert
Hutchison, Michael Clark
Prior, J. M. L.


Cooper-Key, Sir Neill
Iremonger, T. L.
Pym, Francis


Cordle, John
Irvine, Bryant Godman (Rye)
Quennell, Miss J. M.


Costain, A. P.
Jenkin, Patrick (Woodford)
Ramsden, Rt. Hn. James


Craddock, Sir Beresford (Spelthorne)
Johnson Smith, G. (E. Grinstead)
Rawlinson, Rt. Hn. Sir Peter


Crawley, Aldan
Jones, Arthur (Northants, S.)
Rees-Davies, W. R.


Crouch, David
Jopling, Michael
Renton, Rt. Hn. Sir David


Cunningham, Sir Knox
Joseph, Rt. Hn. Sir Keith
Ridley, Hn. Nicholas


Currie, G. B. H.
Kerby, Capt. Henry
Ridsdale, Julian


Dalkeith, Earl of
Kimball, Marcus
Rodgers, Sir John (Sevenoaks)


Dance, James
King, Evelyn (Dorset, S.)
Rossi, Hugh (Hornsey)


d'Avigdor-Goldsmid, Sir Henry
Kitson, Timothy
Royle, Anthony


Dean, Paul (Somerset, N.)
Knight, Mrs. Jill
Scott, Nicholas


Deedes, Rt. Hn. W. F. (Ashford)
Lambton, Viscount
Sharples, Richard


Digby, Simon Wingfield
Lancaster, Col. C. G.
Shaw, Michael (Sc'b'gh &amp; Whitby)


Doughty, Charles
Langford-Holt, Sir John
Sinclair, Sir George


Drayson, G. B.
Legge-Bourke, Sir Harry
Smith, John


du Cann, Rt. Hn. Edward
Lewis, Kenneth (Rutland)
Stainton, Keith


Eden, Sir John
Lloyd, Ian (P'tsm'th, Langstone)
Steel, David (Roxburgh)


Elliot, Capt. Walter (Carshalton)
Lloyd, Rt. Hn. Selwyn (Wirral)
Stodart, Anthony


Elliott, R. W.(N'c'tle-upon-Tyne, N.)
Longden, Gilbert
Summers, Sir Spencer


Farr, John
Loveys, W. H.
Taylor, Sir Charles (Eastbourne)


Fisher, Nigel
Lubbock, Eric
Taylor, Edward M.(G'gow, Cathcart)


Fletcher-Cooke, Charles
McAdden, Sir Stephen
Taylor, Frank (Moss Side)


Forrest, George
MacArthur, Ian
Teeling, Sir William


Fortescue, Tim
Maclean, Sir Fitzroy
Temple, John M.


Foster, Sir John
Macmillan, Maurice (Farnham)
Thatcher, Mrs. Margaret


Galbraith, Hn. T. G.
Maddan, Martin
Thorpe, Jeremy


Giles, Rear-Adm. Morgan
Maginnis, John E.
Tilney, John


Gilmour, Ian (Norfolk, C.)
Marples, Rt. Hn. Ernest
Turton, Rt. Hn. R. H.


Gilmour, Sir John (Fife, E.)
Marten, Neil
van Straubenzee, W. R.


Glover, Sir Douglas
Maude, Angus
Vaughan-Morgan, Rt. Hn. Sir John


Glyn, Sir Richard
Maudling, Rt. Hn. Reginald
Vickers, Dame Joan


Godber, Rt. Hn. J. B.
Mawby, Ray
Walker, Peter (Worcester)


Goodhart, Philip
Maxwell-Hyslop, R. J.
Walker-Smith, Rt. Hn. Sir Derek


Gower, Raymond
Mills, Peter (Torrington)
Wall, Patrick


Grant, Anthony
Mills, Stratton (Belfast, N.)
Watters, Dennis


Grant-Ferris, R.
Miscampbell, Norman
Ward, Dame Irene


Gresham Cooke, R.
Mitchell, David (Basingstoke)
Weatherill, Bernard


Grieve, Percy
Monro, Hector
Wells, John (Maidstone)


Griffiths, Eldon (Bury St. Edmunds)
Morgan, Geraint (Denbigh)
Whitelaw, Rt. Hn. William


Gurden, Harold
Morrison, Charles (Devizes)
Wills, Sir Gerald (Bridgwater)


Hall, John (Wycombe)
Mott-Radclyffe, Sir Charles
Wilson, Geoffrey (Truro)


Hall-Davis, A. G. F.
Munro-Lucas-Tooth, Sir Hugh
Wolrige-Gordon, Patrick


Hamilton, Michael (Salisbury)
Murton, Oscar
Wood, Rt. Hn. Richard


Harris, Frederic (Croydon, N. W.)
Nabarro, Sir Gerald
Woodnutt, Mark


Harris, Reader (Heston)
Neave, Airey
Worsley, Marcus


Harrison, Col. Sir Harwood (Eye)
Nicholls, Sir Harmar
Wylie, N. R.


Hastings, Stephen
Noble, Rt. Hn. Michael
Younger, Hn. George


Hawkins, Paul
Nott, John



Heald, Rt. Hn. Sir Lionel
Onslow, Cranley
TELLERS FOR THE AYES:


Heath, Rt. Hn. Edward
Orr, Capt. L. P. S.
Mr. Jasper More and Mr. Reginald Eyre.


Heseltine, Michael
Orr-Ewing, Sir Ian



Higgins, Terence L.
Osborn, John (Hallam)





NOES


Abse, Leo
Bishop, E. S.
Carter-Jones, Lewis


Albu, Austen
Blackburn, F.
Castle, Rt. Hn. Barbara


Allaun, Frank (Salford, E.)
Boardman, H.
Coe, Denis


Alldritt, Walter
Booth, Albert
Coleman, Donald


Allen, Scholefield
Boston, Terence
Concannon, J. D.


Anderson, Donald
Bowden, Rt. Hn. Herbert
Conlan, Bernard


Archer, Peter
Boyden, James
Corbet, Mrs. Freda


Armstrong, Ernest
Braddock, Mrs. E. M.
Craddock, George (Bradford, S.)


Atkins, Ronald (Preston, N.)
Bradley, Tom
Crawshaw, Richard


Atkinson, Norman (Tottenham)
Bray, Dr. Jeremy
Cronin, John


Bagier, Gordon A. T.
Brooks, Edwin
Crosland, Rt. Hn. Anthony


Barnett, Joel
Broughton, Dr. A. D. D.
Crossman, Rt. Hn. Richard


Beaney, Alan
Brown, Hugh D. (G'gow, Provan)
Cullen, Mrs. Alice


Bellenger, Rt. Hn. F. J.
Brown, Bob (N'c'tle-upon-Tyne, W.)
Davidson, Arthur (Accrington)


Bence, Cyril
Buchan, Norman
Davies, Dr. Ernest (Stretford)


Benn, Rt. Hn. Anthony Wedgwood
Buchanan, Richard (G'gow, Sp'burn)
Davies, G. Elfed (Rhondda, E.)


Bennett, James (G'gow, Bridgeton)
Butler, Herbert (Hackney, C.)
Davies, Harold (Leek)


Bidwell, Sydney
Carmichael, Neil
Davies, Ifor (Gower)







Delargy, Hugh
Kerr, Dr. David (W'worth, Central)
Perry, George H. (Nottingham, S.)


Dell, Edmund
Lawson, George
Price, Christopher (Perry Barr)


Dewar, Donald
Leadbitter, Ted
Price, Thomas (Westhoughton)


Diamond, Rt. Hn. John
Lee, Rt. Hn. Frederick (Newton)
Price, William (Rugby)


Dickens, James
Lestor, Miss Joan
Pursey, Cmdr. Harry


Dobson, Ray
Lever, Harold (Cheetham)
Randall, Harry


Doig, Peter
Lever, L. M. (Ardwick)
Rankin, John


Driberg, Tom
Lewis, Ron (Carlisle)
Roberts, Albert (Normanton)


Dunn, James A.
Lomas, Kenneth
Roberts, Goronwy (Caernarvon)


Dunnett, Jack
Loughlin, Charles
Roberts, Gwilym (Bedfordshire, S.)


Dunwoody, Mrs. Gwyneth (Exeter)
Luard, Evan
Robertson, John (Paisley)


Dunwoody, Dr. John (F'th &amp; C'b'e)
Lyon, Alexander W (York)
Robinson, Rt. Hn. Kenneth (St. P'C as)


Eadie, Alex
Lyons, Edward (Bradford, E.)
Robinson, W. O. J. (Walth'stow, E.)


Edwards, William (Merioneth)
McBride, Neil
Rodgers, William (Stockton)


Ellis, John
McCann, John
Roebuck, Roy


English, Michael
MacColl, James
Rogers, George (Kensington, N.)


Ennals, David
MacDermot, Niall
Rose, Paul


Ensor, David
Macdonald, A. H.
Ross, Rt. Hn. William


Fernyhough, E.
McKay, Mrs. Margaret
Rowland, Christopher (Meriden)


Finch, Harold
Mackenzie, Gregor (Rutherglen)
Ryan, John


Fletcher, Raymond (Ilkeston)
Mackie, John
Shaw, Arnold (Ilford, S.)


Fletcher, Ted (Darlington)
Mackintosh, John P.
Sheldon, Robert


Foot, Sir Dingle (Ipswich)
Maclennan, Robert
Shinwell, Rt. Hn. E.


Foot, Michael (Ebbw Vale)
McMillan, Tom (Glasgow, C.)
Short, Rt. Hn. Edward (N' c'stle-u-Tyne)


Ford, Ben
McNamara, J. Kevin
Short, Mrs. Renée (W'hampton, N. E.)


Fowler, Gerry
MacPherson, Malcolm
Silkin, Rt. Hn. John (Deptford)


Fraser, John (Norwood)
Mahon, Peter (Preston, S.)
Silverman, Julius (Aston)


Freeson, Reginald
Mahon, Simon (Bootle)
Silverman, Sydney (Nelson)


Gardner, Tony
Mallalieu, E. L. (Brigg)
Slater, Joseph


Garrett, W. E.
Mallalieu, J. P. W.(Huddersfield, E.)
Small, William


Ginsburg, David
Manuel, Archie
Snow, Julian


Gourlay, Harry
Mapp, Charles
Spriggs, Leslie


Gray, Dr. Hugh (Yarmouth)
Marquand, David
Steele, Thomas (Dunbartonshire, W.)


Gregory, Arnold
Marsh, Rt. Hn. Richard
Stonehouse, John


Griffiths, David (Rother Valley)
Mason, Roy
Strauss, Rt. Hn. G. R.


Griffiths, Rt. Hn. James (Llanelly)
Mayhew, Christopher
Swingler, Stephen


Griffiths, Will (Exchange)
Mellish, Robert
Symonds, J. B.


Hale, Leslie (Oldham, W.)
Mendelson, J. J.
Taverne, Dick


Hamilton, James (Bothwell)
Mikardo, Ian
Thomas, George (Cardiff, W.)


Harper, Joseph
Millan, Bruce
Thornton, Ernest


Harrison, Walter (Wakefield)
Milne, Edward (Blyth)
Tinn, James


Hart, Mrs. Judith
Mitchell, R. C. (S'th'pton, Test)
Tomney, Frank


Haseldine, Norman
Moonman, Eric
Urwin, T. W.


Hazell, Bert
Morris, Charles R. (Openshaw)
Varley, Eric G.


Henig, Stanley
Morris, John (Aberavon)
Wainwright, Edwin (Dearne Valley)


Herbison, Rt. Hn. Margaret
Moyle, Roland
Wallace, George


Hobden, Dennis (Brighton, K'town)
Murray, Albert
Watkins, David (Consett)


Hooley, Frank
Newens, Stan
Weitzman, David


Horner, John
Noel-Baker, Rt. Hn. Philip (Derby, S.)
Wellbeloved, James


Houghton, Rt. Hn. Douglas
Norwood, Christopher
Wells, William (Walsall, N.)


Howarth, Harry (Wellingborough)
Oakes, Gordon
Whitaker, Ben


Howell, Denis (Small Heath)
Ogden, Eric
White, Mrs. Eirene


Howie, W.
O'Malley, Brian
Whitlock, William


Hughes, Rt. Hn. Cledwyn (Anglesey)
Oram, Albert E.
Willey, Rt. Hn. Frederick


Hughes, Hector (Aberdeen, N.)
Orbach, Maurice
Williams, Alan (Swansea, W.)


Hughes, Roy (Newport)
Orme, Stanley
Williams, Alan Lee (Hornchurch)


Hunter, Adam
Oswald, Thomas
Williams, Clifford (Abertillery)


Hynd, John
Owen, Dr. David (Plymouth, S'tn)
Williams, Mrs. Shirley (Hitchin)


Jackson, Colin (B'h'se &amp; Spenb'gh)
Owen, Will (Morpeth)
Willis, George (Edinburgh, E.)


Jackson, Peter M. (High Peak)
Paget, R. T.
Wilson, William (Coventry, S.)


Jenkins, Hugh (Putney)
Palmer, Arthur
Winnick, David


Johnson, Carol (Lewisham, S.)
Pannell, Rt. Hn. Charles
Woodburn, Rt. Hn. A.


Jones, Dan (Burnley)
Park, Trevor
Woof, Robert


Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Parker, John (Dagenham)
Yates, Victor


Jones, J. Idwal (Wrexham)
Parkyn, Brian (Bedford)
Zilliacus, K.


Judd, Frank
Pavitt, Laurence



Kelley, Richard
Pearson, Arthur (Pontypridd)
TELLERS FOR THE NOES:


Kenyon, Clifford
Pentland, Norman
Mr. Charles Grey and



Perry, Ernest G. (Battersea, S.)
Mr. Ioan L. Evans.

8.30 p.m.

Mr. Marsh: I beg to move Amendment No. 15, in page 2, line 45, to leave out from 'and' to the end of line 13 on page 3 and to insert:
'with the consent of, or in accordance with the terms of any general authority given by, the Minister, to acquire by agreement, and to hold, interests in other companies;

(b) with the consent of, or in accordance with the terms of any general authority given by, the Minister, to form, or take part in forming, companies; and'.

Mr. Deputy Speaker (Mr. Sydney Irving): With this Amendment I suggest that we take Amendment No. 16, in page 3, line 4, leave out from 'together' to end of line 6.

Amendment No. 132, in page 3, line 6, at end insert:
Provided that in any case to which sections 6 and 7 of the Monopolies and Mergers Act 1965 apply, the Minister shall not give any consent under this subsection and the Corporation shall not act in pursuance of any general authority given by the Minister until the Board of Trade has referred the matter to the Monopolies Commission and the Minister has considered the report of the Monopolies Commission thereon.;
and the two Amendments to the Minister's proposed Amendment.

Mr. Marsh: This is an Amendment brought before the House in response to a debate in Committee and is intended to satisfy, as I am sure it will, the wishes of hon. Members opposite. In Committee I gave an undertaking
to table on Report Amendments…which will have the effect
of ensuring
that the Corporation will require my consent or general authority before acquiring interests in or forming, or taking part in the formation of, companies in the Iron and Steel field".—[OFFICIAL REPORT, Standing Committee D, 6th December, 1966; c. 2014.]
As now drafted, the Bill requires the Corporation to have the Minister's consent before acquiring interests in, on forming companies, outside the iron and steel field. The effect of the Amendment is simply to make that consent necessary in respect of companies within the iron and steel field. I feel sure that hon. Members opposite will agree that the Amendment, while it may well not meet all their desires, at least is moving in the direction in which they would have us move.

Mr. Barber: In due course, unless the Minister makes a very different kind of speech in response, I shall formally move the first Amendment to the Minister's Amendment. I understand that we are discussing the Amendments to the Minister's Amendment together with the substantive Amendment. This is perhaps the best way to proceed.

Mr. Deputy Speaker: The only way in which that Amendment to the Amendment could be formally moved would be if the Minister were to accept it. I do not think that he has indicated that he will accept it. I think that we can discuss only the Amendment which has been moved and the other two Amendments for debate.

Mr. Barber: I take it that at a later stage if necessary we shall be able to vote on the Amendment to the Amendment.

Mr. Deputy Speaker: Only if the Minister accepts it, because the Amendments to the Amendment have been selected only for debate, not for Division.

Sir Gerald Nabarro: On a point of order. How can the Minister accept an Amendment to which he is hostile?

Mr. Deputy Speaker: The Chair cannot be responsible for the reactions of the Minister, but the procedure is clear that the two Amendments to the Amendment were not selected other than for debate. If the Minister were to accept them, they could be moved.

Sir Harmar Nicholls: Point of order. Perhaps I ought to know this, but is it the usual practice to accept Amendments for debate but not to have them voted upon? I thought that the whole purpose of Report stage was to debate and then to give effect to the debate by hon. Members voting if they were inclined to. Is it possible for the Chair to take away chat right?

Mr. Deputy Speaker: This is the normal practice of the House and it is undertaken on practically every Report stage. Indeed, this has been evident on some of the Amendments which have already been discussed today.

Mr. Barber: Further to that point of order, Mr. Deputy Speaker. May I make this request to you? From my own experience and recollection when we have been considering Finance Bills on Report as well as in Committee, from time to time if the Opposition felt strongly about a particular Amendment which was selected for debate and not for Division, if a Division was requested Mr. Speaker has allowed the Division to take place. I wonder whether I might make this request? It is most unlikely that I shall make it again during the proceedings on this Bill. It would be a help to me to know whether, in those circumstances, you would allow a Division on this Amendment. This would resolve a difficulty and I could put the case for the Opposition quite briefly.

Mr. Deputy Speaker: The formal position is that representations should have been made to Mr. Speaker at an earlier stage. These Amendments have been on the Order Paper for quite a while, and I think it would be most unwise of me to accept responsibility at this late stage, when the opportunity has been available for the right hon. Gentleman to make representations, to vary the procedure which Mr. Speaker has laid down.

Mr. Barber: I understand your position, Mr. Deputy Speaker. I shall have a proposal to make at the end of my brief remarks on the substance of my Amendment. I can deal briefly with these two Amendments.

Sir G. Nabarro: On a point of order. I am sorry to interrupt my right hon. Friend, but is there not a typographical error on the Order Paper? It says:
Line 2, leave out from first 'of' to 'the' in line 3.
According to my Bill there is no 'of' in line 2 anywhere.

Mr. Barber: My hon. Friend is looking at the Amendment to the Amendment in the name of the Minister. Line 2 refers to line 2 in the Minister's Amendment, not to the Bill.

Sir G. Nabarro: I am sorry.

Mr. Barber: As I say, I can deal briefly with the substance of the Amendments to the Minister's Amendment. The Minister's Amendment represents a concession to the case which we made out in Committee, and for that we are grateful. But I hope that, on reflection, the Minister will see fit to go that hit further. In these days we have not all that much faith in Ministers, but it is, at any rate, some safeguard that diversification cannot take place without the specific consent of the Minister. This is all that we are asking in our two Amendments.
In the Minister's Amendment No. 15 he is empowered to give a general authority to the National Steel Corporation to diversify. We believe that this is not good enough because, as appeared in our discussion on the previous Amendment, the powers of diversification are unlimited for all practical purposes, and we cannot believe that it is right that Parliament should give to the National Steel Corpora-

tion, through the general authority of the Minister of Power, the right to engage in unlimited diversified activities.
For these reasons we believe that it is wholly reasonable to ask the right hon. Gentleman to amend his Amendment so as to provide that in every case where diversification under the provisions of Clause 2(2) takes place, there shall be specific consent given by the right hon Gentleman.
If the right hon. Gentleman will tell me that between now and the time when this Bill is considered in another place he will give genuine consideration to this point, I shall not press it. But since, for reasons that I well understand, Mr. Deputy Speaker, you have not felt able to accede to my request enabling us to vote on the Amendment —this I quite understand—if the right hon. Gentleman is not going to be forthcoming at all about our Amendments but intends to stand pat on Amendment No. 15 standing in his name, I feel hound to say that having made our position quite clear, we should wish to vote against Amendment No. 15 as being the only possible way in the circumstances that we could express our regret at the fact that he has not been able to accede to our reasonable request.

Sir Douglas Glover: srose—

Hon. Members: Hear, hear.

Sir D. Glover: It is now twenty minutes to nine, and this is the first time that I have intervened in the debate today. If hon. Members opposite are so enthusiastic when I rise, I assure them that this will not be the last time, and I thank them very much for their encouragement.
I rise to speak on this Amendment because, although the Minister has gone some little way, but not nearly enough, to satisfy the Opposition, I want to try to bring him back to the straight and narrow path of pure Socialism. [Laughter.] I am being very serious, and I hope that hon. Members opposite will take note of what I am about to say. One must approach a nationalised industry and a free enterprise industry in a totally different manner. I admit quite honestly that if I were controlling a large corporation, and the particular


field in which I was controlling that corporation began to diminish, I should feel, in my shareholders' interest, that it was my right and proper duty to diversify, because I believe in the profit motive and my aim would be to make a profit for the concern of which I was the responsible director.
There is a totally different philosophy, if I have understood the "Old Testament" which governs most of the activities of the party opposite, when it comes to nationalisation, because when somebody, the hon. Member for Ormskirk, or Liverpool, West Derby (Mr. Ogden), or somebody else is put in charge of a nationalised industry, he is given a very different prescript of what his obligation is to the nation.
His first responsibility is not to make a profit. As I understand Socialist thinking, his first responsibility is to run the affairs of that particular industry or that activity in the best interests of the people as a whole who make up the community. That is Socialist doctrine—and if any hon. Member on the other side of the House wishes the opportunity to say that it is not, then I will be only too willing to give way. I would have thought that that was pure Socialist doctrine, that one runs the show in the interests of the people, and therefore to the best advantage of the nation as a whole.
If that is true, then the whole basis of diversification must fall to the ground. If I can cite a case that we had in the House the other day—whilst Mr. Deputy Speaker is talking to somebody else I will get this in because it may be out of order—we had a Bill to give the Coal Board power to diversify into gas in the North Sea.
Let us follow this argument, as it is germane to my argument about the steel industry. Lord Robens is responsible for running coal at the present moment. He is expected to devote all his energies, all his research and all his mind to making that particular facet of our national life the most productive, the most efficient that he can make it in the national interest. Suppose, by some waving of a wand, that he puts down a couple of bore holes into the North Sea, produces 5,000 million cubic feet of gas per annum, and makes £20 million a year for the Coal Board. Do hon.

Members think that the House would treat the activities of the Coal Board with the same critical analysis as it does now? Do they think that Lord Robens would be so concerned as to whether every ounce of advantage for the nation was got out of coal if, in fact, he was making this large profit on the side?
The same thing applies to the steel industry. The Corporation is being given the responsibility of running the steel industry—I emphasise it again—in the best interests of the nation. Suppose the Corporation diversified. Suppose, as a result of that diversification, it became a great competitor of I.C.I., as it could do quite easily under the Bill? In those conditions, the Corporation might show a different picture. It might produce a substantial profit for the nation. Its interest charges, its depreciation, its capital on-cost and everything else might be amply covered. But, in fact, the profit might be coming from its diversified activities and the steel industry itself could be making a loss. Is this what the nation wants? Is it what pure Socialism wants?
8.45 p.m.
It is legitimate for a free enterprise industry to go in for diversification, but it is contrary to the basic thinking on nationalisation of the party opposite. Hon. and right hon. Members are now saying that they want the Corporation to have the right to diversify. This is an admission that they do not think that the Corporation will do awfully well just running steel. [HON. MEMBERS: "Oh".] All right. Then why do they want diversification?

Mr. William Edwards: If the hon. Gentleman could stop being doctrinaire for a moment, would he not agree—he has mentioned I.C.I.—that there might be public benefit in someone going into competition with some parts of I.C.I.'s activities? Would it not be as well for a nationalised industry to do this?

Sir D. Glover: With respect, that is a red herring. I am not saying that the State should not, if it desired to do so, set up a corporation to deal with the chemical industry. But the Minister is here appointing, under our direction, a Corporation to deal with steel.

Mr. William Edwards: In the public interest.

Sir D. Glover: To deal with steel. Basically, we are not asking that Corporation to do anything other than make the best success it can of the steel industry in the interest of the nation.
Human nature being what it is, if I could make myself believe in Socialism—I should find it very difficult—and if I were in charge of the Corporation, it would narrow my attention and concentrate my endeavour and drive far more if I knew that I had to report to the nation on the success of my efforts and those efforts were directed to the subject now under debate, the steel industry. It would diversify and take away the object of the exercise if I knew that by this or that diversification I could make a profit which would cloak the overall result of the efficiency of the steel industry.
It goes deeper than that. If it is possible for the Corporation to make a profit from diversification and it regards those activities as most important, will not the Corporation be likely to spend a lot of its funds on research into the diversified activities and less on research into the basic steel industry.
It is almost certain that the industry will now be nationalised, and I am trying to make it efficient. I hope hon. Members have sufficient knowledge of my sincerity to understand that I mean that. I cannot see how one injects the biggest drive into the Corporation in order to make its activities efficient if it is allowed to keep taking its eye off the ball and be carried away by more attractive easy profit which is not basically in the interest of the nation.
Fundamental rethinking on the subject of nationalisation must be done by the party opposite. It is very easy to say that nationalised industries have been harried in the past and it would have been attractive if they had been able to take up an outside activity and make a profit. But basically that is not their thinking. Their basic thinking is that if coal, electricity, gas, steel—and water, perhaps—are in the undivided control of a national corporation, run in the interests of the people, that is the best way to run it.
It does not make that Corporation's task any easier if it diversifies into all sorts of other activities which will cloud

the issue and perhaps remove the wrath of Parliament. Perhaps that is the reason behind this. I hope not, because we want to make the steel industry more and more efficient. I plead with the right hon. Gentleman that the right way to do so is for the Corporation to deal with steel and steel alone on behalf of the British people, and not be carried away by the other attractive possibilities of diversification, which I believe are contrary to the basic thinking of the party opposite.

Sir Harmar Nicholls: Does the Minister not see that unless he gives an indication that he will look with sympathy on the Amendment to his Amendment he risks bringing the Parliamentary system into disrepute? In the debate on the last Amendment the main burden of his argument was that we could not have Parliament interferring with day-to-day matters of running this great industry but, that we could rest assured that he, or whoever was Minister at the time, would have given consent, and that there would have been an examination at Ministerial level before there was what might be unfair competition in diversification.
That was the whole burden of his argument: he or his successors would look into the merits of diversification before it was accepted. My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), who keeps good records of what is going on, has marked very clearly what the right hon. Gentleman said in Committee in trying to allay concern on this matter. He said that before he allowed any diversification it would have to have his consent or general authority.
He is now relying completely upon the general authority, which to some extent risks bringing the Parliamentary system into disrepute. He gave the impression in Committee that diversification would go through the sieve of the Minister's person approval. Only a minute or two ago, he got through the last debate by arguing that he would give personal approval before it was allowed to happen. Now he puts down an Amendment in such general terms that "general authority" is not a true description. If the powers will be so wide as these words will leave them, even the Ministerial safeguard is hardly there.
To have got through the Committee stage and the last Amendment giving the


general impression that he would do something which he now refuses to do, carries with it the grave risk of bringing the whole system upon which all our legislation is based into some disrepute. I therefore hope that even now he will give careful thought to giving an indication that he is prepared to accept my right hon. Friend's Amendment.

Mr. John Wells: My hon. Friend the Member for Ormskirk (Sir D. Glover) saw certain perils in the risk of diversification for the sake of imaginary profits. I share his distaste for this excessively wide diversification, but I fear that on occasion there migh well be a board seeking to diversify for Socialist doctrinaire reasons, and far from diversifying for profit motives it might well diversify for loss motives. It is an extraordinary concept that we keep hearing from the party opposite about industries which reputedly fail the nation and which should therefore be swallowed up by parts of industry which come within the shadow of this umbrella of diversification.
I see this thing as being far more dangerous the other way than my hon. Friend the Member for Ormskirk saw it.

Sir D. Glover: I was not suggesting that the Corporation would make a greater profit by diversification. I said that it was contrary to the whole of Socialist thinking, which is a totally different argument.

Mr. Wells: I am grateful to my hon. Friend. What he says is true. But the fact remains that we might in future have Socialist Ministers seeking greater steps of nationalisation and going far beyond even the intended dreams of the present Minister and the present Prime Minister. I hope, therefore, that the Minister will apply himself to the request by my right hon. Friend to look at our Amendment.
Mention has also been made of Ministerial scrutiny before any diversification. We all know from our correspondence with Departments how slow and frequently incompetent Ministerial scrutinies can be. I am not suggesting that the right hon Gentleman is not an extremely hard-working person, but the fact remains that he has been working very hard on many matters in the last few months

which would have prevented him from scrutinising other matters which may either have had to lie upon his desk or have been dealt with by some Parliamentary Secretary—come and go as they do—or by a permanent official, perhaps with that official saying, "I do not really deal with the day-to-day affairs of the Corporation; I expect that it is all right."
The talk about Ministerial scrutiny is a poor substitute for Parliamentary scrutiny. Parliamentary scrutiny, however tedious it may be to Ministers and officials, is seen by the whole country to take place, whereas Ministerial scrutiny does or does not take place behind closed doors. For this reason, I am much opposed to the substitution of any sort of Ministerial scrutiny for Parliamentary scrutiny.

Mr. F. A. Burden: I am sorry that I have been prompted to say something about this, but I see this proposal as a dangerous extension of Socialism. When in the past an industry has been nationalised, it has been made perfectly clear what was being done. There has been no doubt about it. But now this Amendment will give the National Steel Corporation the opportunity to move in and start nationalisation under cover of a great number of other industries, for we must accept that steel is the prime product used by an enormous number of our industries—for example, the motor car industry.
It is obvious that if the Corporation starts to diversify in the terms in which it is laid down by the Minister in this Amendment, the Minister can prompt it to buy interests in the motor industry and in many of the other industries in which steel is the prime product. Not only will this start to give an opportunity for thinking of further industries to nationalise. It could also have a tremendous effect upon our export trade over a wide range of merchandise and products. It shows also great lack of faith in the steel industry and the Corporation that the Government should say "We want power to diversify." If steel is so important to us, as it is, as a prime product, then surely the heads of the new steel industry will have enough to do to look after that industry, making that prime product, which is of so much importance in the making of other manufactures, to ensure that it is run efficiently


and well, and selling at the right price, to enable it to compete in world markets.

9.0 p.m.

Mr. Marsh: Does the hon. Gentleman not think he is perhaps getting slightly off the point? These Amendments have nothing to do with whether the industry diversifies or whether it does not. It is merely an argument about what form of consent I should give. The argument about diversification we have had already.

Mr. Burden: With great respect to the Minister if he is going to give consent to diversification, then this is about diversification, fundamentally. It must be. I should not have thought that people would be as naïve as to fall for that argument by the right hon. Gentleman. This, basically, is what this discussion is really about—diversification. It must be The Minister is the one who will determine to what extent it should be carried out.
I really hope that we are not going to be brushed aside like this. I know the Minister is very reasonable about many things, but he is also very astute, and a lot of his hon. Friends would be very happy indeed to see this opportunity used to start to test out new areas for possible nationalisation. I do not think that the Steel Bill is in its concept, or in its operation, should be used for anything of the sort. If the Government are going ahead with their Socialism, if they are going to nationalise more industries, then they should have come to this House and nationalise each particular industry, and not have a back-door means of buying their way into other industries dependent upon the steel industry for the tools of their trade.
Why is it that the Minister and the party opposite are saying it is the steel industry they are now going to nationalise in order to make it more efficient, and yet at the same time feel it will be useful for the steel industry to buy its way—to diversify, but to buy its way—into other industries in order to get control of other industries for which the steel industry produces the prime product? This is, I believe, a dangerous philosophy, and a philosophy which can do our exports very much harm. Let the Corporation get on with the job of running the steel industry, and let the other industries run their businesses.

Mr. Michael Alison: Very briefly, since the Minister himself touched, in a brief intervention, on a point which is, I think, very germane to the argument, namely, the precise degree of control of some of these investment projects and diversified undertakings the Minister should have, I should like to put to him a short and simple point, which has arisen in the past on the performance of the National Coal Board, and which may, conceivably, arise in future in respect of the National Steel Corporation.
When we get a great nationalised industry like coal finding it particular product has been challenged by a new form of energy, for example, oil, then, in the words of the Chairman of the National Coal Board, it has to "protect the investment". I have no doubt that the Minister has noticed that there is a certain amount of wild casting around by some of these public authorities for some new sector into which they can go legitimately to "protect the investment" if they can. He must have had a few nightmares about, for example, the investment Lord Robens made in the Draysley Company of Slough, about which the Minister answered a Question by me the other day—and about home fires, too.
The Minister could save himself a good many headaches over the possibility that in future the Corporation, having to "protect its investment", to use the jargon of the Coal Board, let us say, in 10 or 15 years, because of some development in plastics, something like that, might seek to invest in some rather rarified projects, if he ensured that at least it should have to get his specific authority, and not merely some general authority. We on this side believe that there is a great deal of public money in which might be called the dying nationalised industries, which are dying in the face of modern developments in their own field. The Minister would have been spared a good many headaches if his Department had had a chance to examine some of these diversified investments which the Corporations have made.
Let the Minister give himself the power of our Amendment to the Amendment to scrutinise the projects first and not make it necessary for the Coal Board and others


to come to the House for more money because they have lost money on what they have done already.

Mr. Marsh: This has been a surprising reaction to what I thought was an act of unparalleled generosity in producing the Amendment, which, I think hon. Members opposite will agree, goes some way to meet the point which they have made. Clearly, the trouble with putting down Government Amendments is that hon. Members are encouraged to seek to amend them ad infinitum.
The hon. Member for Barkston Ash (Mr. Alison) made an interesting point when he said, as did his hon. Friend the Member for Gillingham (Mr. Burden), that where a nationalised industry is diversifying and purchasing assets, clearly a Minister must ensure that this is done broadly in line with Government policy. It is conceivable, although it has never happened, that the chairman of the board of a nationalised industry could, in realms of wild fantasy and theory, begin to diversify all over the place and proceed to build an empire which was highly undesirable from the point of view of everybody except the board. That is obviously a possibility. The point is that the Minister already has power to require a situation wherein he gives his specific consent.
The Opposition Amendment would make it impossible to act under a general authority in all cases but would require the Minister to give—and thereby the Corporation to require—specific consent in every case.
I do not think that there is any difference of opinion on either side about the need to ensure that if an industry of the size of the Corporation suddenly begins to get involved in large projects, this is clearly a matter in which the Minister of the day, and through him Parliament, must have, and rightly has, an interest.
On the other hand, one must bear in mind that the Steel Corporation would be a very large company, and precisely because of that many of its acquisitions would be of no significance. The Corporation would be involved in such a wide range of activities that it would be faced with two sets of decisions: one would be acquisitions of interests of sig-

nificance, and the other, of which hon. Members opposite who are engaged in commerce and business will be aware, would be the day-to-day acquisitions in which a large company from time to time finds itself engaged. I am in no doubt whatever, and I would certainly give a firm undertaking, that the Corporation would be required to seek Ministerial consent for each acquisition of interests in a company except in cases where such an acquisition would be of little significance.
On the other hand, it might prove desirable for the Corporation to form new companies which would merely take over assets already owned by the Corporation or the publicly-owned companies. In this case—and in a myriad of other acquisitions which hon. Members from their experience, can probably think of much more rapidly than I—in which a large company of that size would be involved, certainly the Bill gives the Minister power to require either that specific consent or his general authority be sought. It would certainly be the intention of the Government—I think, of any Minister in his own self-interest, to put it no higher—to require the Corporation to seek the Minister's specific consent in cases of significance. The disagreement is not one of principle; it is merely that it is felt that if the Minister were deprived of the opportunity of giving a general authority it might involve a lot of unnecessary bureaucracy.

Mr. Burden: I am concerned about the right hon. Gentleman's comment that the Corporation would be allowed to carry on only those deals and acquisitions which were of little significance. What might appear to the Minister to be of little significance, and which he would pass, might, if it were known to Parliament, and Parliament had the opportunity of dealing with it, be found to be of considerable significance. This is all so vague that it worries me, because what Ministers might consider to be of little significance could be considered by Parliament to be of great significance, but Parliament will never have the opportunity of prognosticating on it.

Mr. Marsh: I understand the hon. Gentleman's point, and it is a real one, but the House has to accept that the Corporation cannot be run from Westminster, any more than it can from Whitehall. It


will become another Government Department if it is not given some authority, subject of course to the consent of the Minister. I agree with the hon. Member for Gillingham. It is difficult to define the dividing line. This is one of the problems.
I think it would be accepted that there are differences of scale and magnitude. It may be that no one would agree on the definition of "magnitude", but a division has to be made at some stage. I appreciate and sympathise with the point made by hon. Gentlemen opposite. I accept that this is not a statutory matter, and I ask hon. Gentlemen opposite to accept that it is the intention—I think that it would be the intention of any Minister to require specific consent to be sought in respect of any major move. There must, however, be a recognition that in an organisation as big and as diffuse as the Corporation, leaving aside its diversified activities—

Sir G. Nabarro: We have all got our minds poisoned in this context by what took place before, admittedly under a Conservative Government. Only 10 per cent. of the steel industry was left nationalised, namely, Richard Thomas and Baldwins, but it gobbled up the Whitehead Iron and Steel Company, and a large sum of money was involved, without any kind of Parliamentary consent. This was done in spite of widespread protests by my hon. Friends and myself when we were on the benches opposite. It is that kind of practice which we are anxious to avoid.

Mr. Marsh: I accept that, without mentioning the specific instance. I think that where there are significant matters of that kind, clearly there should be specific Ministerial consent. I do not think there is any dispute about this. I had thought that this was a fairly non-controversial speech.
There is, however, a range in which it would be reasonable and legitimate to require a general authority, and all I am asking—and I end on this because I think that the difference is pretty clear—is that the Government should be permitted to retain both general and specific authority,

in the knowledge that over the last few years—I am not making a party point—the House has taken into account the sort of thing mentioned by the hon. Member for Worcestershire, South (Sir G. Nabarro). I am not sure that that sort of thing would be likely to happen again, under either Government. I would not have thought so. The argument is not one of principle, but merely that this would be an unreasonable restriction.

Mr. Barber: With the leave of the House, I should like to say a few words in reply to the Minister. I agree with the right hon. Gentleman that we cannot agree on this, and therefore the matter must be taken to a Division.
I was astonished to hear the right hon. Gentleman refer to day-to-day acquisitions by a large company. I know of no large company in Great Britain which is engaged in day-to-day acquisitions. There are, of course, companies which have acquired many other subsidiaries, but these are matters which are looked at with the greatest possible care.
What I find so unconvincing about the right hon. Gentleman's argument is the fact that here we are concerned with acquisitions of other companies, many of which have nothing whatever to do with iron and steel. If the right hon. Gentleman had said, "In connection with acquisitions within the steel industry there will be general authority in many cases, but I give the assurance that wherever there is an acquisition of a company which has nothing whatever to do with iron and steel I will in every case require a specific consent from myself", I would not have pressed the matter to a Division.
We have had a debate which has gone on for longer than I had expected after the brief speech in which I referred to my Amendment to the Government Amendment, but as we cannot vote on my Amendment, for reasons which I understand, we shall have to show our displeasure by voting against the Government Amendment.

Question put, That the words proposed to be left out stand part of the Bill:—

The House divided: Ayes 210, Noes 261.

Division No. 242.]
AYES
[9.16 p.m.


Alison, Michael (Barkston Ash)
Atkins, Humphrey (M't'n &amp; M'd'n)
Barber, Rt. Hn, Anthony


Allason, James (Hemel Hempstead)
Awdry, Daniel
Batsford, Brian


Astor, John
Baker, W. H. K.
Beamish, Col. Sir Tufton




Bell, Ronald
Griffiths, Eldon (Bury St. Edmunds)
Nicholls, Sir Harmar


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Gurden, Harold
Noble, Rt. Hn. Michael


Berry, Hn. Anthony
Hall, John (Wycombe)
Nott, John


Biffen, John
Hall-Davis, A. G. F.
Onslow, Cranley


Biggs-Davison, John
Hamilton, Michael (Salisbury)
Orr, Capt. L. P. S.


Birch, Rt. Hn. Nigel
Harris, Frederic (Croydon, N. W.)
Orr-Ewing, Sir Ian


Blaker, Peter
Harris, Reader (Heston)
Osborn, John (Hallam)


Body, Richard
Harrison, Col. Sir Harwood (Eye)
Osborne, Sir Cyril (Louth)


Bossom, Sir Clive
Hawkins, Paul
Page, Graham (Crosby)


Boyd-Carpenter, Rt. Hn. John
Heald, Rt. Hn. Sir Lionel
Page, John (Harrow, W.)


Boyle, Rt. Hn. Sir Edward
Heath, Rt. Hn. Edward
Pearson, Sir Frank (Clitheroe)


Braine, Bernard
Heseltine, Michael
Percival, Ian


Brinton, Sir Tatton
Higgins, Terence L.
Peyton, John


Brown, Sir Edward (Bath)
Hill, J. E. B.
Pink, R. Bonner


Bruce-Gardyne, J.
Hirst, Geoffrey
Powell, Rt. Hn. J. Enoch


Bryan, Paul
Hobson, Rt. Hn. Sir John
Price, David (Eastleigh)


Buchanan-Smith, Alick (Angus, N&amp;M)
Hogg, Rt. Hn. Quintin
Prior, J. M. L.


Bullus, Sir Eric
Holland, Philip
Pym, Francis


Burden, F. A.
Hooson, Emlyn
Quennell, Miss J. M.


Campbell, Gordon
Hordern, Peter
Ramsden, Rt. Hn. James


Carlisle, Mark
Hornby, Richard
Rawlinson, Rt. Hn. Sir Peter


Carr, Rt. Hn. Robert
Howell, David (Guildford)
Rees-Davies, W. R.


Cary, Sir Robert
Hunt, John
Renton, Rt. Hn. Sir David


Channon, H. P. G.
Hutchison, Michael Clark
Ridley, Hn. Nicholas


Chichester-Clark, R.
Iremonger, T. L.
Ridsdale, Julian


Clark, Henry
Irvine, Bryant Godman (Rye)
Rodgers, Sir John (Sevenoaks)


Clegg, Walter
Jenkin, Patrick (Woodford)
Rossi, Hugh (Hornsey)


Cooke, Robert
Johnson Smith, G. (E. Grinstead)
Royle, Anthony


Cooper-Key, Sir Neill
Jones, Arthur (Northants, S.)
Scott, Nicholas


Cordle, John
Jopling, Michael
Sharples, Richard


Costain, A. P.
Joseph, Rt. Hn. Sir Keith
Shaw, Michael (Sc'b'gh &amp; Whitby)


Craddock, Sir Beresford (Spelthorne)
Kerby, Capt. Henry
Sinclair, Sir George


Crawley, Aidan
Kimball, Marcus
Smith, John


Crouch, David
King, Evelyn (Dorset, S.)
Stainton, Keith


Crowder, F. P.
Kitson, Timothy
Steel, David (Roxburgh)


Cunningham, Sir Knox
Knight, Mrs. Jill
Stodart, Anthony


Currie, G. B. H.
Lambton, Viscount
Summers, Sir Spencer


Dalkeith, Earl of
Lancaster, Col. C. G.
Taylor, Sir Charles (Eastbourne)


Dance, James
Langford-Hott, Sir John
Taylor, Edward M.(G'gow, Cathcart)


d'Avigdor-Goldsmid, Sir Henry
Legge-Bourke, Sir Harry
Taylor, Frank (Mose Side)


Dean, Paul (Somerset, N.)
Lewis, Kenneth (Rutland)
Teeling, Sir William


Deedes, Rt. Hn. W. F. (Ashford)
Lloyd, Ian (P'tsm'th, Langstone)
Temple, John M.


Digby, Simon Wingfield
Lloyd, Rt. Hn. Selwyn (Wirral)
Thatcher, Mrs. Margaret


Doughty, Charles
Longden, Gilbert
Thorpe, Jeremy


Drayson G. B.
Loveys, w. H.
Tilney, John


du Cann, Rt. Hn. Edward
Lubbock, Eric
Turton, Rt. Hn. R. M.


Eden, Sir John
McAdden, Sir Stephen
van Straubenzee, W. R.


Elliot, Capt. Walter (Carshalton)
MacArthur, Ian
Vaughan-Morgan, Rt. Hn. Sir John


Eyre, Reginald
Maclean, Sir Fitzroy
Vickers, Dame Joan


Farr, John
Macmillan, Maurice (Farnham)
Walker-Smith, Rt. Hn. Sir Derek


Fisher, Nigel
Maddan, Martin
Wall, Patrick


Fletcher-Cooke, Charles
Maginnis, John E.
Walters, Dennis


Forrest, George
Marples, Rt. Hn. Ernest
Ward, Dame Irene


Fortescue, Tim
Marten, Neil
Weatherill, Bernard


Foster, Sir John
Maude, Angus
Wells, John (Maidstone)


Galbraith, Hn. T. G.
Maudling, Rt. Hn. Reginald
Whitelaw, Rt. Hn. William


Giles Rear-Adm. Morgan
Mawby, Ray
Wills, Sir Gerald (Bridgwater)


Gilmour, Ian (Norfolk, C.)
Maxwell-Hyslop, R. J.
Wilson, Geoffrey (Truro)


Gilmour, Sir John (Fife, E.)
Mills, Peter (Torrington)
Wolrige-Gordon, Patrick


Glover, Sir Douglas
Mills, Stratton (Belfast, N.)
Wood, Rt. Hn. Richard


Glyn, Sir Richard
Miscampbell, Norman
Woodnutt, Mark


Godber, Rt. Hn. J. B.
Monro, Hector
Worsley, Marcus


Goodhart, Philip
More, Jasper
Wylie, N. R.


Gower, Raymond
Morgan, Geraint (Denbigh)
Younger, Hn. George


Grant, Anthony
Morrison, Charles (Devizes)



Grant-Ferris, R.
Mott-Radclyffe, Sir Charles
TELLERS FOR THE AYES:


Gresham Cooke, R.
Munro-Lucas-Tooth, Sir Hugh
Mr. R. W. Elliott and Mr. David Mitchell.


Grieve, Percy
Murton, Oscar




Nabarro, Sir Gerald





NOES


Abse, Leo
Beaney, Alan
Bradley, Tom


Albu, Austen
Bence, Cyril
Bray, Dr. Jeremy


Allaun, Frank (Salford, E.)
Bennett, James (G'gow, Bridgeton)
Brooks, Edwin


Alldritt, Walter
Bidwell, Sydney
Broughton, Dr. A. D. D.


Allen, Scholefield
Blackburn, F.
Brown, Hugh D. (G'gow, Provan)


Anderson, Donald
Boardman, H.
Brown, Bob (N'c'tle-upon-Tyne, W.)


Archer, Peter
Benn, Rt. Hn. Anthony Wedgwood
Buchan, Norman


Armstrong, Ernest
Booth, Albert
Buchanan, Richard (G'gow, Sp'burn)


Atkins, Ronald (Preston, N.)
Boston, Terence
Butter, Herbert (Hackney, C.)


Atkinson Norman (Tottenham)
Bowden, Rt. Hn. Herbert
Butler, Mrs. Joyce (Wood Green)


Bagier, Gordon A. T.
Boyden, James
Carmichael, Neil


Barnett Joel
Braddock, Mrs. E. M.
Carter-Jones, Lewis







Castle, Rt. Hn. Barbara
Jackson, Colin (Bh'se &amp; Spenb'gh)
Pearson, Arthur (Pontypridd)


Coe, Denis
Jackson, Peter M. (High Peak)
Peart, Rt. Hn. Fred


Coleman, Donald
Jenkins, Hugh (Putney)
Pentland, Norman


Concannon, J. D.
Johnson, Carol (Lewisham, S.)
Parry, Ernest G. (Battersea, S.)


Conlan, Bernard
Jones, Dan (Burnley)
Parry, George H. (Nottingham, S.)


Corbet, Mrs. Freda
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Price, Christopher (Perry Barr)


Craddock George (Bradford, S.)
Jones, J. Idwal (Wrexham)
Price, Thomas (Westhoughton)


Crawshaw, Richard
Judd, Frank
Price, William (Rugby)


Cronin, John
Kelley, Richard
Pursey, Cmdr. Harry


Crosland, Rt. Hn. Anthony
Kenyon, Clifford
Randall, Harry


Crossman, Rt. Hn. Richard
Kerr, Dr. David (W'worth, Central)
Rankin, John


Cullen, Mrs. Alice
Lawson, George
Redhead, Edward


Dalyell, Tam
Leadbitter, Ted
Roberts, Albert (Normanton)


Davidson, Arthur (Accrington)
Lee, Rt. Hn. Frederick (Newton)
Roberts, Goronwy (Caernarvon)


Davies, Dr. Ernest (Stretford)
Lestor, Miss Joan
Roberts, Gwilym (Bedfordshire, S.)


Davies, G. Elfed (Rhondda, E.)
Lever, Harold (Cheetham)
Robertson, John (Paisley)


Davies, Harold (Leek)
Lever, L. M. (Ardwick)
Robinson, Rt. Hn. Kennneth (St. P'c'as)


Davies, Ifor (Gower)
Lewis, Ron (Carlisle)
Robinson, W. O. J. (Walth'stow, E.)


Delargy, Hugh
Lomas, Kenneth
Rodgers, William (Stockton)


Dell, Edmund
Loughlin, Charles
Roebuck, Roy


Dewar, Donald
Luard, Evan
Rogers, George (Kensington, N.)


Diamond, Rt. Hn. John
Lyon, Alexander W. (York)
Rose, Paul


Dickens, James
Lyons, Edward (Bradford, E.)
Ross, Rt. Hn. William


Dobson, Ray
McBride, Neil
Rowland, Christopher (Meriden)


Doig, Peter
McCann, John
Ryan, John


Driberg, Tom
MacColl, James
Shaw, Arnold (Ilford, S.)


Dunn, James A.
MacDermot, Niall
Sheldon, Robert


Dunnett, Jack
Macdonald, A. H.
Shinwell, Rt. Hn. E.


Dunwoody, Mrs. Gwyneth (Exeter)
McKay, Mrs. Margaret
Shore, Peter (Stepney)


Dunwoody, Dr. John (F'th &amp; C'b'e)
Mackenzie, Gregor (Rutherglen)
Short, Rt. Hn. Edward (N'ctle-u-Tyne)


Eadie, Alex
Mackie, John
Short, Mrs. Renée (W'hampton, N. E.)


Edwards, William (Merioneth)
Mackintosh, John P.
Silkin, Rt. Hn. John (Deptford)


Ellis, John
Maclennan, Robert
Silverman, Julius (Aston)


English, Michael
McMillan, Tom (Glasgow, C.)
Silverman, Sydney (Nelson)


Ennals, David
McNamara, J. Kevin
Slater, Joseph


Ensor, David
MacPherson, Malcolm
Small, William


Fernyhough, E.
Mahon, Peter (Preston, S.)
Snow, Julian


Finch, Harold
Mahon, Simon (Bootle)
Spriggs, Leslie


Fletcher, Raymond (Ilkeston)
Mallalieu, E. L. (Brigg)
Steele, Thomas (Dunbartonshire, W.)


Fletcher, Ted (Darlington)
Mallalieu, J. P. W. (Huddersfield, E.)
Stonehouse, John


Foot, Sir Dingle (Ipswich)
Manuel, Archie
Strauss, Rt. Hn. G. R.


Foot, Michael (Ebbw Vale)
Mapp, Charles
Swingler, Stephen


Ford, Ben
Marquand, David
Symonds, J. B.


Fowler, Gerry
Marsh, Rt. Hn. Richard
Taverne, Dick


Fraser, John (Norwood)
Mason, Roy
Thomas, George (Cardiff, W.)


Freeson, Reginald
Mayhew, Christopher
Thornton, Ernest


Gardner, Tony
Mellish, Robert
Tinn, James


Garrett, W. E.
Mendelson, J. J.
Tomney, Frank


Ginsburg, David
Mikardo, Ian
Urwin, T. W.


Gourlay, Harry
Millan, Bruce
Varley, Eric G.


Gray, Dr. Hugh (Yarmouth)
Milne, Edward (Blyth)
Wainwright, Edwin (Dearne Valley)


Gregory, Arnold
Mitchell, R. C. (S'th'pton, Test)
Wallace, George


Grey, Charles (Durham)
Moonman, Eric
Watkins, David (Consett)


Griffiths, David (Rother Valley)
Morris, Alfred (Wythenshawe)
Weitzman, David


Griffiths, Rt. Hn. James (Llanelly)
Morris, Charles R. (Openshaw)
Wellbeloved, James


Griffiths, Will (Exchange)
Morris, John (Aberavon)
Wells, William (Walsall, N.)


Hale, Leslie (Oldham, W.)
Moyle, Roland
Whitaker, Ben


Hamilton, James (Bothwell)
Murray, Albert
White, Mrs. Eirene


Harper, Joseph
Newens, Stan
Whitlock, William


Harrison, Walter (Wakefield)
Noel-Baker, Rt. Hn. Philip (Derby, S.)
Willey, Rt. Hn. Frederick


Hart, Mrs. Judith
Norwood, Christopher
Williams, Alan (Swansea, W.)


Haseldine, Norman
Oakes, Gordon
Williams, Alan Lee (Hornchurch)


Hazell, Bert
Ogden, Eric
Williams, Clifford (Abertillery)


Henig, Stanley
O'Malley, Brian
Williams, Mrs. Shirley (Hitchin)


Herbison, Rt. Hn. Margaret
Oram, Albert E.
Willis, George (Edinburgh, E.)


Hobden, Dennis (Brighton, K'town)
Orbach, Maurice
Wilson, William (Coventry, S.)


Hooley, Frank
Orme, Stanley
Winnick, David


Horner, John
Oswald, Thomas
Woodburn, Rt. Hn. A.


Houghton, Rt. Hn. Douglas
Owen, Dr. David (Plymouth, S'tn)
Woof, Robert


Howarth, Harry (Wellingborough)
Owen, Will (Morpeth)
Yates, Victor


Howell, Denis (Small Heath)
Paget, R. T.
Zilliacus, K.


Howie, W.
Palmer, Arthur



Hughes, Rt. Hn. Cledwyn (Anglesey)
Pannell, Rt. Hn. Charles
TELLERS FOR THE NOES:


Hughes, Hector (Aberdeen, N.)
Park, Trevor
Mr. Edward Bishop


Hughes, Roy (Newport)
Parker, John (Dagenham)
and Mr. Ioan L. Evans.


Hunter, Adam
Parkyn, Brian (Bedford)



Hynd, John
Pavitt, Laurence

Proposed words there inserted in the Bill.

Mr. Freeson: I beg to move Amendment No. 19, in page 3, line 16, leave out from 'for' to 'any' in line 18 and insert:

'any group of companies (whether consisting of all or any of the publicly-owned companies, other companies or both)'.


As now drafted, the Bill empowers the Corporation to provide common services "for the publicly-owned companies or for any group of such companies or of such companies and other companies". This is a mixture of authority to deal with the nationalised sector and provide a service also for the mixture of the nationalised sector and the private companies. In Committee I understand there was some discussion to the effect that the services should be provided by the Corporation for the private companies alone, without necessarily imposing the condition that there should be a mixed group of nationalised and private companies.
An undertaking was given by the Minister that this would be considered. It has been thought about and although it will be difficult to see circumstances in which it will be necessary to provide services for a group of privately-owned companies alone, since the requirement would be to provide an enabling power, there is no objection to it. This Amendment has been tabled to meet the point raised in Committee by the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) and others.

Mr. Patrick Jenkin: We are grateful to the hon. Gentleman for having put this into the Bill. As the Parliamentary Secretary has said, he cannot see any occasion when it might be necessary to use this power for the benefit of the private sector alone. Nevertheless, I am sure that the Government are wise to have accepted this because an occasion might arise when such a power is needed and it would be very unfortunate if it were not there.

Amendment agreed to.

Further Amendment made: No. 21, in line 20, leave out from 'services' to 'and' in line 21 and insert 'therefor'.—[Mr. Freeson.]

Clause 3.—(GENERAL DUTY OF THE CORPORATION.)

9.30 p.m.

Dr. Bray: I beg to move Amendment No. 25, in page 3, line 45, at the end to insert:
'produced by the Corporation and the publicly-owned companies.'
The right hon. Member for Altrincham and Sale (Mr. Barber) was concerned in Committee with the duty of the Corpora-

tion to provide efficient and economic supplies of
…iron and steel products, and to secure that such products are available in such quantities, and are of such types, qualities and sizes…
as may be required. He was afraid that this referred not only to production by the Corporation and the publicly-owned companies but also to the private sector, thus making the Corporation responsible in the private sector for something it had no means of executing. He thought that this might cause possible difficulties and interference. His Amendment in Committee was accepted. This Amendment is a consequential one, making the same change in another Clause, and is, therefore, entirely consequential on the Amendment moved by the right hon. Gentleman in Committee.

Amendment agreed to.

Mr. Peyton: I beg to move, Amendment No. 26, in page 4, line 1, to leave out from 'sizes' to the end of line.
The offending words are:
…and are available at such prices…
Not even the most prodigious of our inquiries in Committee were able to elicit from the Government an explanation of why they considered that the Clause, with the abominable phrase "It shall be incumbent on the Corporation", should be in the Bill. I could not understand —and this is still my view—why the simple phrase "the Corporation shall promote" should not be used. However, I am more concerned with the words which state that it shall be the duty of the Corporation
…to secure that such products are available in such quantities, and are of such types, qualities and sizes, and are available at such prices, as may seem to the Corporation best calculated to satisfy the reasonable demands of the persons …who use such products…
At present drafted, the Clause contains the words
…and are available at such prices…".
Since it has nothing to do with the Corporation to fix the price, I suggest that either the words mean nothing or that they have a vicious meaning and should be deleted.
The financial duties of the Corporation appear later in the Bill. Clause 14 deals with its general financial duties


and what is chargeable to revenue account. Clause 16 deals with the Corporation's commencing financial debt and the rate of interest which should be paid thereon. I do not understand why it is necessary to have the words which I propose to delete. I see that it is desirable to place on the Corporation a duty to see that iron and steel products are available in the
…quantities…types, qualities and sizes…
for which there is a demand. However, I do not see why it is necessary or meaningful to impose on the Corporation the loose duty which is imposed by the words
…and are available at such prices…
which seem to imply that the Corporation will be judging the price and will fix it according to standards perhaps other than those appearing later in the Bill and according to the considerations contained in the ordinary policy for the finances of nationalised industries, which the present Government support.
I hope the Parliamentary Secretary will be able to tell us why these words are necessary. From my reading of the Bill they are quite unnecessary. If they are there merely for ornament we shall have to accept it, but if for some other reason there should be a very full explanation. This Amendment deals with a very brief point which can be dealt with expeditiously unless the Parliamentary Secretary produces some unexpected hazard.

Sir G. Nabarro: My name supports the Amendment because the words alluded to by my hon. Friend the Member for Yeovil (Mr. Peyton) are superfluous and redundant. I shall not weary the House by reading the first subsection of Clause 14. Therein is enshrined the principal financial provision of this Bill. It says, as in the case of other nationalised industries, that the Corporation will pay its way taking year with year. That is what it means, but the Corporation cannot pay its way taking year with year unless it charges prices appropriate to the market. I should have thought that self-evident.
Whereas the Corporation representing 90 per cent. of the steel manufacturing resources of Britain obviously has to meet the requirements of the market in regard to quality of steel, in regard to

specifications of steel and other mundane matters of that sort it is, in the matter of price, a governing factor that overall the Corporation must pay its way. The words become doubly redundant when one considers that the Corporation in Britain has no control whatever over the prices at which steel will be imported into Britain. If, for example, steel is imported from Japan at £10, £20 or £30 per ton less than the economic cost of production in Britain, what a dilemma is the Corporation to be placed in. Does it regard its first duty as the first subsection of Clause 14, that it shall pay its way taking year by year, or does it artificially rig its price to the British market, go to the Board of Trade, and ask for an antidumping order?
This Corporation is supposed to be a commercial concern, a large commercial concern. It must therefore attune its prices to the conditions of the market. I claim that it is wholly unnecessary to write into this Clause any reference whatever to price because the governing factor is found in a later Clause. That will be the overriding factor. If the assurances given by the Minister in Committee are any judge, those assurances were that at all times the Corporation would be conducted on a commercial basis to earn profits. That was the first consideration. It cannot earn those profits unless it attunes its prices to market conditions and has regard to the sharp competitive edge of the price of imported steel.
I therefore hope that my hon. Friends will support this Amendment and if necessary vote for the deletion of these offensive words.

Mr. Alison: I speak briefly, seeking clarification and reassurance from the Parliamentary Secretary on the subject of prices. To what extent does this Clause as now drafted actually give the Minister a direct or indirect but effective power over price-fixing?
The phrase in lines 5 and 6 on page 4:
and to further the public interest in all respects
seems to introduce a non-commercial criterion which is relevant presumably to the mind of the Government. If this is so and the Minister claims some insight or say in the matter of price-fixing by this subsection, does it or does it not conflict with the provisions of the Treaty


of Paris, particularly Article III of the Treaty?
The Parliamentary Secretary will know that part of the trouble which the Community has been having is the sort of ding-dong battle between national governments, particularly the French Government, in fixing prices of steel products, the High Authority to be the regulating authority. If it is proposed to write in a specific power to the Government to regulate prices, does the public interest give the Minister authority in any way to intervene or guide? If so, he has clearly introduced a very doubtful feature into the Bill in regard to the possibility of accession to the Treaty of Paris.

Mr. Freeson: The question asked by the hon. Member for Barkston Ash (Mr. Alison) is answered more adequately than I could put into words by quoting from paragraph 36 on page 13 of the original Steel Nationalisation White Paper, on which the legislation is based, under the heading "Protection of Consumers":
Although the nationalisation measure will not give the Minister any specific powers on prices, he can be expected to be concerned with questions of price policy in the nationalised iron and steel industry….".
That best summarises the position. It is broadly the position which obtains with all the existing nationalised industries. There is no detailed interference. There is a general regard to policy by the Ministry, and the Treasury is also involved in this.
I do not wish in any way to use offensive words or to be provocative or to show a rhinoceros skin, or whatever the other references were to myself earlier this evening, but I find the Amendment a little obscure. I cannot understand how the issue of price can be separated from the question of the general "reasonable demand." The issue of price cannot be separated from the other factors which are set out in the Bill.

Sir G. Nabarro: The steel industry today is operating at 70 per cent. capacity. If what the Parliamentary Secretary has just said were correct, all steel prices would have to be raised tomorrow morning by £20 a ton to make the operations economic and profitable.

Mr. Freeson: That is a non sequitur which need not be taken any further by myself. Price is an essential element demand. This is an obvious economic point. The demand for a product will depend not only on type, quality and size, as set out in the Bill, but also by reference to price. This is self-evident, I should have thought, unless there is some aspect of this which was raised in Committee, when I was not present, and which evades me. I do not think I can say anything further on it, except that the reference to price is standard in nationalisation legislation. It is not a new reference introduced into this Bill. There is nothing sinister about it.

Mr. Peyton: I am glad to have the Parliamentary Secretary's assurance that there is not intended to be anything sinister. I cannot for the life of me see that it is necessary to put these words in. What arouses my suspicion is, as my hon. Friend the Member for Barkston Ash (Mr. Alison) has said, that it seems to be somehow associated with this blanket reference at the end which is meaning-less—
and to further the public interest in all respects".
The Corporation's financial duties are laid down elsewhere in the Bill. Why expand on them here? Either the duties laid upon the Corporation elsewhere are being substantially repeated, or something different is being done at this point in the Bill which is in conflict with those duties.

Mr. Freeson: I do not think that there is a conflict here. The financial aspects of the nationalisation of the industry set out elsewhere in the Bill deal with the broad objects that the Corporation must pursue. Here we are dealing with a particular aspect. The price issue cannot be separated from matters of type, quantity and size. This is a fair general commercial point to make. If it is accepted that there is nothing particularly sinister or peculiar about it in the Government's mind—and there is not—it can be accepted that it should be allowed to stay in the Bill along with the other factors which are joined with it. Clearly, on fulfilling its responsibilities with regard to price, the Corporation will have very much in mind


its other financial responsibilities, as referred to by hon. Members, in other parts of the Bill.

9.45 p.m.

Mr. Patrick Jenkin: It has been a source of complaint from both sides of the House—and, indeed, it was in Committee also—that the Government did not appear when they drew up this Statute to have learned very much in the 20 years since the previous Statute was drawn up. Over and over again we have heard from Government spokesmen, replying to debates on points moved from this side of the House, "Oh well, this is standard form in a nationalisation Statute." This is an answer which will not do.
The points which have been made by my hon. Friends the Members for Yeovil (Mr. Peyton) and for Worcestershire, South (Sir G. Nabarro) are absolutely true. This phrase "as part of the general duties of the Corporation" can clearly conflict with the overriding financial duty which is put on the Corporation by Clause 14(1). If one is to have regard to what the Joint Parliamentary Secretary to the Ministry of Technology said in his important speech in the debate on Clause 14, that the Corporation is at all times to be run on strictly commercial grounds, it seems to me that this phrase is superfluous because the Corporation will be bound to charge the prices it can get for its products having regard to the state of the market. If it is intended to do something more than that, the Parliamentary Secretary has not explained what more it is intended to do.
This is a legacy of nearly 30 years of control. When the Import Duties Act, 1932, was passed and the 10 per cent. tariff was imposed, as a quid pro quo the Government took powers to control the prices of steel and they have had those powers ever since. It is part and parcel of this legislation that the Government should abandon anything in the nature of detailed price control such as has been exercised by the Iron and Steel Board since 1953. The phrase hangs on as the vestigial appendix which is regarded as a part of every nationalisation Measure, and it is included here.
If the Government are going to run the Corporation as a commercial concern they should not impose on the

Corporation any specific duty with regard to prices. Pricing is an essential aspect of the commercial freedom of any organisation, and if one interferes with the organisation's right to fix prices one is inevitably interfering with its right to run as a commercial organisation. In view of the powerful arguments put by my hon. Friends, we would not be right to let this go through.
Here the Parliamentary Secretary, faced with clear and cogent arguments, has entirely failed to answer them. Could he say now, with the leave of the House, that he would be prepared to look at this again in the light of the overall objectives which the Corporation has got, with the possibility of introducing an Amendment in another place? If he would, I am certain that my hon. Friends would then feel that it would not be right to press the matter to a Division, but if he is not prepared to give that undertaking I can only advise by hon. Friends to support the Amendment in the Division Lobby.

Mr. Freeson: I cannot give that undertaking, because, frankly, I did not find the arguments which were put by the hon. Member for Yeovil (Mr. Peyton) particularly cogent or clear. I said this in the politest possible way during the course of my earlier remarks. The point seems to be an obscure one. May I make it quite clear that I did not say that the question of price being included in the Bill as it now stands means that this was other than the common commercial practice.
The Bill reads that it shall be the task of the Corporation to see that the iron and steel products produced by the public sector
are available in such quantities, and are of such types, qualities and sizes, and are available at such prices, as may seem to the Corporation best calculated to satisfy the reasonable demands of
manufacturing consumers.
This seems to me to be quite a sensible piece of phraseology, very sensibly commercially, and I can see no point in deleting one of the factors such as prices, any more than one shall seek to delete reference to types, qualities, or sizes, etc. It is part of the general set of factors which must be taken into account.

Question put, That the words proposed to be left out stand part of the Bill:—

The House divided: Ayes 257, Noes 211.

Division No. 243.]
AYES
[9.51 p.m.


Abse, Leo
Fowler, Gerry
Mason, Roy


Albu, Austen
Fraser, John (Norwood)
Mayhew, Christopher


Allaun, Frank (Salford, E.)
Freeson, Reginald
Mellish, Robert


Alldritt, Walter
Gardner, Tony
Mendelson, J. J.


Allen, Scholefield
Garrett, W. E.
Mikardo, Ian


Anderson, Donald
Ginsburg, David
Millan, Bruce


Archer, Peter
Gourlay, Harry
Milne, Edward (Blyth)


Armstrong, Ernest
Gray, Dr. Hugh (Yarmouth)
Mitchell, R. C. (S'th'pton, Test)


Atkins, Ronald (Preston, N.)
Gregory, Arnold
Moonman, Eric


Atkinson, Norman (Tottenham)
Grey, Charles (Durham)
Morris, Alfred (Wythenshawe)


Bagier, Gordon A. T.
Griffiths, David (Rother Valley)
Morris, Charles R. (Openshaw)


Barnett, Joel
Griffiths, Rt. Hn. James (Llanelly)
Morris, John (Aberavon)


Beaney, Alan
Griffiths, Will (Exchange)
Moyle, Roland


Bence, Cyril
Hale, Leslie (Oldham, W.)
Murray, Albert


Benn Rt. Hn. Anthony Wedgwood
Hamilton, James (Bothwell)
Newens, Stan


Bennett, James (G'gow, Bridgeton)
Harper, Joseph
Noel-Baker, Rt. Hn. Philip (Derby, S.)


Bidwell, Sydney
Harrison, Walter (Wakefield)
Norwood, Christopher


Blackburn, F.
Hart, Mrs. Judith
Oakes, Gordon


Boardman, H.
Haseldine, Norman
Ogden, Eric


Booth, Albert
Hazell, Bert
O'Malley, Brian


Boston, Terence
Henig, Stanley
Oram, Albert E.


Boyden, James
Herbison, Rt. Hn. Margaret
Orbach, Maurice


Braddock, Mrs. E. M.
Hobden, Dennis (Brighton, K'town)
Orme, Stanley


Bradley, Tom
Hooley, Frank
Oswald, Thomas


Bray, Dr. Jeremy
Horner, John
Owen, Dr. David (Plymouth, S'tn)


Brooks, Edwin
Houghton, Rt. Hn. Douglas
Owen, Will (Morpeth)


Broughton, Dr. A. D. D.
Howarth, Harry (Wellingborough)
Paget, R. T.


Brown, Hugh D. (G'gow, Provan)
Howell, Denis (Small Heath)
Palmer, Arthur


Brown, Bob (N'c'tle-upon-Tyne, W.)
Howie, W.
Pannell, Rt. Hn. Charles


Buchan, Norman
Hughes, Rt. Hn. Cledwyn (Anglesey)
Park, Trevor


Buchanan, Richard (G'gow, Sp'burn)
Hughes, Hector (Aberdeen, N.)
Parker, John (Dagenham)


Butler, Herbert (Hackney, C.)
Hughes, Roy (Newport)
Parkyn, Brian (Bedford)


Butler, Mrs. Joyce (Wood Green)
Hunter, Adam
Pavitt, Laurence


Carmichael, Neil
Hynd, John
Pearson, Arthur (Pontypridd)


Carter-Jones, Lewis
Jackson, Colin (B'h'se &amp; Spenb'gh)
Peart, Rt. Hn. Fred


Castle, Rt. Hn. Barbara
Jackson, Peter M. (High peak)
Pentland, Norman


Coe, Denis
Jenkins, Hugh (Putney)
Perry, Ernest G. (Battersea, S.)


Coleman, Donald
Johnson, Carol (Lewisham, S.)
Perry, George H. (Nottingham, S.)


Concannon, J. D.
Jones, Dan (Burnley)
Price, Christopher (Perry Barr)


Conlan, Bernard
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Price, Thomas (Westhoughton)


Corbet, Mrs. Freda
Jones, J. Idwal (Wrexham)
Price, William (Rugby)


Craddock, George (Bradford, S.)
Judd, Frank
Pursey, Cmdr. Harry


Crawshaw, Richard
Kelley, Richard
Randall, Harry


Cronin, John
Kenyon, Clifford
Rankin, John


Crosland, Rt. Hn. Anthony
Kerr, Dr. David (W'worth, Central)
Redhead, Edward


Crossman, Rt. Hn. Richard
Lawson, George
Roberts, Albert (Normanton)


Cullen, Mrs. Alice
Leadbitter, Ted
Roberts, Goronwy (Caernarvon)


Dalyell, Tam
Lee, Rt. Hn. Frederick (Newton)
Roberts, Gwilym (Bedfordshire, S.)


Davidson, Arthur (Accrington)
Lestor, Miss Joan
Robertson, John (Paisley)


Davies, Dr. Ernest (Stretford)
Lever, Harold (Cheetham)
Robinson, Rt. Hn. Kenneth (St. P'c'as)


Davies, G. Elfed (Rhondda, E.)
Lever, L. M. (Ardwick)
Robinson, W. O. J. (Walth'stow, E.)


Davies, Harold (Leek)
Lewis, Ron (Carlisle)
Rodgers, William (Stockton)


Davies, Ifor (Gower)
Lomas, Kenneth
Roebuck, Roy


Delargy, Hugh
Loughlin, Charles
Rogers, George (Kensington, N.)


Dell, Edmund
Luard, Evan
Rose, Paul


Dewar, Donald
Lyon, Alexander W. (York)
Ross, Rt. Hn. William


Diamond, Rt. Hn. John
Lyons, Edward (Bradford, E.)
Rowland, Christopher (Meriden)


Dickens, James
McBride, Neil
Ryan, John


Dobson, Ray
McCann, John
Shaw, Arnold (Ilford, S.)


Doig, Peter
MacColl, James
Sheldon, Robert


Driberg, Tom
MacDermot, Niall
Shinwell, Rt. Hn. E.


Dunn, James A.
Macdonald, A. H.
Shore, Peter (Stepney)


Dunnett, Jack
McKay, Mrs. Margaret
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)


Dunwoody, Mrs. Gwyneth (Exeter)
Mackenzie, George (Rutherglen)
Short, Mrs. Renée (W'hampton, N. E.)


Dunwoody, Dr. John (F'th &amp; C'b'e)
Mackie, John
Silkin, Rt. Hn. John (Deptford)


Eadie, Alex
Mackintosh, John P.
Silverman, Julius (Aston)


Edwards, William (Merioneth)
Maclennan, Robert
Silverman, Sydney (Nelson)


Ellis, John
McMillan, Tom (Glasgow, C.)
Slater, Joseph


Ennals, David
McNamara, J. Kevin
Small, William


Ensor, David
MacPherson, Malcolm
Snow, Julian


Evans, Ioan L. (Birmin'h'm, Yardley)
Mahon, Peter (Preston, S.)
Spriggs, Leslie


Fernyhough, E.
Mahon, Simon (Bootle)
Steele, Thomas (Dunbartonshire, W.)


Finch, Harold
Mallalieu, E. L. (Brigg)
Strauss, Rt. Hn. G. R.


Fletcher, Raymond (Ilkeston)
Mallalieu, J. P. W. (Huddersfield, E.)
Swingler, Stephen


Fletcher, Ted (Darlington)
Manuel, Archie
Taverne, Dick


Foot, Sir Dingle (Ipswich)
Mapp, Charles
Thomas, George (Cardiff, W.)


Foot, Michael (Ebbw Vale)
Marquand, David
Thornton, Ernest


Ford, Ben
Marsh, Rt. Hn. Richard
Tinn, James




Tomney, Frank




Urwin, T. W.
White, Mrs. Eirene
Woodburn, Rt. Hn. A.


Varley, Eric G.
Willey, Rt. Hn. Frederick
Woof, Robert


Wainwright, Edwin (Dearne Valley)
Williams, Alan (Swansea, W.)
Yates, Victor


Wallace, George
Williams, Alan Lee (Hornchurch)
Zilliacus, K.


Watkins, David (Consett)
Williams, Clifford (Abertillery)



Weitzman, David
Williams, Mrs. Shirley (Hitchin)
TELLERS FOR THE AYES:


Wellbeloved, James
Willis, George (Edinburgh, E.)
Mr. Charles Whitlock and Mr. Edward Bishop.


Wells, William (Walsall, N.)
Wilson, William (Coventry, S.)



Whitaker, Ben
Winnick, David





NOES


Alison, Michael (Barkston Ash)
Godber, Rt. Hn. J. B.
Morgan, Geraint (Denbigh)


Allason, James (Hemel Hempstead)
Goodhart, Philip
Morrison, Charles (Devizes)


Astor, John
Gower, Raymond
Munro-Lucas-Tooth, Sir Hugh


Atkins, Humphrey (M't'n &amp; M'd'n)
Grant, Anthony
Murton, Oscar


Awdry, Daniel
Grant-Ferris, R.
Nabarro, Sir Gerald


Baker, W. H. K.
Gresham Cooke, R.
Nicholls, Sir Harmar


Barber, Rt. Hn. Anthony
Grieve, Percy
Noble, Rt. Hn. Michael


Batsford, Brian
Griffiths, Eldon (Bury St. Edmunds)
Nott, John


Beamish, Col. Sir Tufton
Gurden, Harold
Onslow, Cranley


Bell, Ronald
Hall, John (Wycombe)
Orr, Capt. L. P. S.


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Hall-Davis, A. G. F.
Orr-Ewing, Sir Ian


Berry, Hn. Anthony
Hamilton, Michael (Salisbury)
Osborn, John (Hallam)


Biffen, John
Harris, Frederic (Croydon, N. W.)
Osborne, Sir Cyril (Louth)


Biggs-Davison, John
Harris, Reader (Heston)
Page, Graham (Crosby)


Birch, Rt. Hn. Nigel
Harrison, Col. Sir Harwood (Eye)
Page, John (Harrow, W.)


Black, Sir Cyril
Hastings, Stephen
Pearson, Sir Frank (Clitheroe)


Blaker, Peter
Hawkins, Paul
Percival, Ian


Body, Richard
Heald, Rt. Hn. Sir Lionel
Peyton, John


Bossom, Sir Clive
Heath, Rt. Hn. Edward
Pink, R. Bonner


Boyd-Carpenter, Rt. Hn. John
Heseltine, Michael
Powell, Rt. Hn. J. Enoch


Boyle, Rt. Hn. Sir Edward
Higgins, Terence L.
Price, David (Eastleigh)


Braine, Bernard
Hill, J. E. B.
Prior, J. M. L.


Brinton, Sir Tatton
Hirst, Geoffrey
Pym, Francis


Brown, Sir Edward (Bath)
Hobson, Rt. Hn. Sir John
Quennell, Miss J. M.


Bruce-Gardyne, J.
Hogg, Rt. Hn. Quintin
Ramsden, Rt. Hn. James


Bryan, Paul
Holland, Philip
Rawlinson, Rt. Hn. Sir Peter


Buchanan-Smith, Alick (Angus, N&amp;M)
Hooson, Emlyn
Rees-Davies, W. R.


Bullus, Sir Eric
Hordern, Peter
Renton, Rt. Hn. Sir David


Burden, F. A.
Hornby, Richard
Ridley, Hn. Nicholas


Campbell, Gordon
Howell, David (Guildford)
Ridsdale, Julian


Carlisle, Mark
Hunt, John
Rodgers, Sir John (Sevenoaks)


Carr, Rt. Hn. Robert
Hutchison, Michael Clark
Rossi, Hugh (Hornsey)


Cary, Sir Robert
Iremonger, T. L.
Royle, Anthony


Channon, H. P. G.
Irvine, Bryant Godman (Rye)
Scott, Nicholas


Chichester-Clark, R.
Jenkin, Patrick (Woodford)
Sharples, Richard


Clark, Henry
Johnson Smith, G. (E. Grinstead)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Clegg, Walter
Jones, Arthur (Northants, S.)
Sinclair, Sir George


Cooke, Robert
Jopling, Michael
Smith, John


Cooper-Key, Sir Neill
Joseph, Rt. Hn. Sir Keith
Stainton, Keith


Cordle, John
Kerby, Capt. Henry
Steel, David (Roxburgh)


Costain, A. P.
Kimball, Marcus
Stodart, Anthony


Craddock, Sir Beresford (Spelthorne)
King, Evelyn (Dorset, S.)
Summers, Sir Spencer


Crawley, Aldan
Kitson, Timothy
Taylor, Sir Charles (Eastbourne)


Crouch, David
Knight, Mrs. Jill
Taylor, Edward M.(G'gow, Cathcart)


Crowder, F. P.
Lambton, Viscount
Taylor, Frank (Moss Side)


Cunningham, Sir Knox
Lancaster, Col. C. G.
Teeling, Sir William


Currie, G. B. H.
Langford-Holt, Sir John
Temple, John M.


Dalkeith, Earl of
Legge-Bourke, Sir Harry
Thatcher, Mrs. Margaret


Dance, James
Lewis, Kenneth (Rutland)
Thorpe, Jeremy


d'Avigdor-Goldsmid, Sir Henry
Lloyd, Ian (P'tsm'th, Langstone)
Tilney, John


Dean, Paul (Somerset, N.)
Lloyd, Rt. Hn. Selwyn (Wirral)
Turton, Rt. Hn. R. H.


Deedes, Rt. Hn. W. F. (Ashford)
Longden, Gilbert
van Straubenzee, W. R.


Digby, Simon Wingfield
Loveys, W. H.
Vaughan-Morgan, Rt. Hn. Sir John


Doughty, Charles
Lubbock, Eric
Vickers, Dame Joan


Drayson, G. B.
McAdden, Sir Stephen
Walker, Peter (Worcester)


du Cann, Rt. Hn. Edward
MacArthur, Ian
Walker-Smith, Rt. Hn. Sir Derek


Eden, Sir John
Maclean, Sir Fitzroy
Wall, Patrick


Elliot, Capt. Walter (Carshalton)
Macmillan, Maurice (Farnham)
Walters, Dennis


Eyre, Reginald
Maddan, Martin
Ward, Dame Irene


Farr, John
Maginnis, John E.
Weatherill, Bernard


Fisher, Nigel
Marples, Rt. Hn. Ernest
Wells, John (Maidstone)


Fletcher-Cooke, Charles
Marten, Neil
Whitelaw, Rt. Hn. William


Forrest, George
Maude, Angus
Wills, Sir Gerald (Bridgwater)


Fortescue, Tim
Maudling, Rt. Hn. Reginald
Wilson, Geoffrey (Truro)


Foster, Sir John
Mawby, Ray
Wood, Rt. Hn. Richard


Galbraith, Hn. T. G.
Maxwell-Hyslop, R. J.
Woodnutt, Mark


Giles, Rear-Adm. Morgan
Mills, Peter (Torrington)
Worsley, Marcus


Gilmour, Ian (Norfolk, C.)
Mills, Stratton (Belfast, N.)
Wylie, N. R.


Gilmour, Sir John (Fife, E.)
Miscampbell, Norman
Younger, Hn. George


Glover, Sir Douglas
Mitchell, David (Basingstoke)
TELLERS FOR THE NOES:


Glyn, Sir Richard
Monro, Hector
Mr. R. W. Elliott and Mr. Jasper More.

It being after Ten o'clock, further consideration of the Bill, as amended, stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That the Proceedings on the Iron and Steel Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Whitlock.]

IRON AND STEEL BILL

Bill, as amended (in the Standing Committee), further considered.

Mr. Edward M. Taylor: I beg to move Amendment No. 28, in page 4, line 5, after 'purposes', to insert:
'to avoid the imposing of any substantial price differentials in particular areas which could have the effect of frustrating regional development,'.
I am very grateful to you, Mr. Speaker, for having selected the Amendment, because it gives me an opportunity of speaking briefly on a refinement of a point upon which I touched briefly in Committee. At that time I had the support of my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) and the hon. Member for Bothwell (Mr. James Hamilton). I am most grateful that they are both present tonight.
Scotland's interests were mentioned in Committee at length and on many occasions. I am afraid that the impression was created that this was all rather a joke, but the particular point in the Amendment is desperately serious and vital to the interests of Scotland. If the Amendment and its spirit are not approved, there will inevitably be a higher price for steel in Scotland than in the rest of the country, and that will knock the heart out of Scottish steel and heavy industry.
I sincerely believe that if this happens it is inevitable that the development and expansion of the Scottish steeel industry will stop, because it will be impossible to justify it. Scotland cannot at present bear a great deal more. We have 88,000 unemployed, the increase is accelerating at double the rate for the rest of Great Britain, and it looks as if it will get worse. One steel works closed a couple of days

ago and there are indications that more will follow.
My Amendment is not being used as an attempt to have a crack at this Government. The question of differentials in nationalised industries stemmed from the previous Government. Admittedly, it has become worse under the present Government in two of the nationalised industries but the point is that this is something for which one Government alone are not responsible. Differentials started with the last Government but have increased and got worse under this. What worries me is the reference in Clause 3 to the fact that prices with
…such variations in the terms and conditions on which such products are supplied as may arise from ordinary commercial considerations or from the public interest.
It is the phrase "ordinary commercial considerations" which concerns me. If regard is paid to ordinary commercial considerations—to the costs of production in the different areas—inevitably the price of steel will be substantially higher in Scotland. This is solely because of the different prices charged by the other nationalised industries.
The Scottish steel industry is no less efficient than the industry in the rest of the country. It is no less modern and in some ways it is well ahead of the rest of the country, were it not so, it could not survive. But, simply because of the differentials policy of other nationalised industries, the Scottish steel industry is not in fair competition. It starts off with a ball and chain round its feet and cannot move forward because of these differentials.
In March last year, an additional 10s. per ton was added to the price of coking coal in Scotland. The result was that for one steel works—Colvilles—an extra cost of £900,000 per year was incurred. This year, Colvilles has lost £2 million but had there been no differential in the price of coal, had Colvilles been able to get its coal at the same price as elsewhere it would have made a profit of over £1 million.
That is what the differential means to Scotland. In every other area where steel is produced in Britain, the price of coal is much lower than it is in Scotland. I will quote some figures. In Derbyshire and Nottinghamshire, where we have Stewarts & Lloyds, Staveleys and Stanton


Iron Works, the price is 105s. per ton; for Colvilles it is 133s. 6d. a ton—a difference of 30s. a ton which means an extra cost of almost £3 million for that one firm. For the United Steel Companies in Yorkshire, the cost is 100s. per ton. In South Wales, where we have Richard Thomas and Baldwins and Guest Keen and Nettlefolds, the price is 115s. 4d. per ton.
What amazes and alarms me is to find how little is known about this and the extent to which the Government do not even appear to take it into consideration at all. I asked a Question today—written unfortunately—about the price of coal. The only information that the Parliamentary Secretary could give me was information that I gave the Standing Committee in December. What about the price of coal in other basic constituent elements of the costs of the steel industry? Here the hon. Gentleman gave figures, but only in respect of 1965–66. They showed that the average revenue per therm for gas in Scotland was 25·92d., compared with a national average of 22·47d. per therm. The answer pointed out that since then there has been various tariff changes which must be taken into account. He did not mention that one of these was a 13 per cent. increase for Scotland whereas, in some areas, no increase has been made at all. Here is another factor in "ordinary commercial considerations" which means that the price of steel will be much higher in Scotland.
Then we come to the third and final basic cost so far as the steel companies are concerned, the rates. The Steel Review for last month deplored the fact that for the steel companies as a whole the rates in 1965 came to 12s. 6d. per ton in cost, a very substantial sum indeed, which adds to the costs of the steel industry. What it did not say was that, in Scotland, at Colvilles, our major works, in 1965 there was 27s. 9d —more than double—which had to be allowed for rates. So here we have a situation where, if we have this Clause unamended, and the Government operate ordinary commercial considerations, as they have in every nationalised industry, inevitably the cost will be much higher in Scotland. Colvilles alone, in 1965, paid over £1 million in local rates.
What would be the argument for ordinary commercial considerations? It may be suggested, as has been suggested from both sides of the House, that each area should stand on its own. But how should we define an area? Should we say that Ballachulish should pay a higher price than Auchenshuggle? We can take one large area, or a small area. It all depends what we want to take, but the Government have decided that Scotland should be taken as an area on its own. We know why the price of coal is dear in Scotland, because for social reasons certain pits are kept open. This is not largesse on the part of the English Government. It is obviously a thing we pay for ourselves. This Clause, if this change were not made, would mean inevitably that the price must be higher.
I would challenge anyone in this House to say that Scottish steel is in any way inefficient. It has spent more on capital development, in relation to the number of men employed, than, I believe, any other steel-making area in the country. Our steel industry is efficient; it is forward-looking; but, inevitably, unless something can be done to remove these differentials it will be impossible for steel to survive in Scotland, far less expand and develop, as it must.
If this Amendment is not accepted, inevitably the price must be higher, and this will have a direct effect on heavy industry, on shipbuilding and other industries on which Scotland still depends largely for its income and national livelihood. For example, if we take steel alone, there are only about 32,000 people directly employed in steel, but there are about 250,000 people who in Scotland directly or indirectly depend on steel for their livelihood. If we have a differential price for steel as we have for coal, gas, electricity, then the heart will be knocked out of Scottish industry and the future will be very grim indeed.
In this Amendment I am not asking for a subsidy at all. We want fair and free competition, and I believe we can take on any steel industry in the country in fair and free competition, but that means getting fair and equal treatment so far as the basic costs of the nationalised industries are concerned. Give us equality, not a subsidy, and we will compete, and I believe that the industry will continue to expand and develop.
That is why it is essential that the Government should accept this Amendment, or, if they cannot accept this Amendment because of inadequacy in its drafting, let them say quite simply that they accept the proposition contained in the Amendment. If they cannot put it in the Bill, let them at least say that this will be their policy. It must be their policy if the steel industry is to survive and the heavy industry of Scotland is to have any hope of a future. For that reason, let me say to the Government that this is one point which is desperately serious for Scotland, one which must be accepted, and on which, I hope, the Government will show some sympathy.

10.15 p.m.

Mr. O'Malley: On a number of occasions I have been critical about some aspects of the administration and financial organisation of Colvilles, but I have a great sympathy with Colvilles in what the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) has said, as I indicated in Committee.
We have a situation in which Colvilles, and, I think, also Bairds and Scottish Steel Ltd., are paying substantially more for the coking coal which they buy than their counterparts, for example, which are dependent on coal supplied from the Yorkshire coalfields. It was a Government decision taken by a Conservative Government that for reasons which transcended economic reasons there should be an extension of investment in the steel industry at Ravenscraig. I believe that that was the right decision when one considers all the factors, and not merely the economic factors, which the Government of the day obviously had to consider when they were considering where the investment in new steel sheet plant should be made.
A Government having made that decision, and that Government having been supported by the Labour Party backbench Members—and, I think, by the whole of the Labour Party at the time—that this new plant should be put into Scotland, there is a strong argument that something should be done to assist the Scottish steel industry because of the tremendous differential in the price of coking coal.
The hon. Member for Cathcart recognises, I think, in his Amendment that it is perhaps inevitable that there will

be price differentials between one area and another in, for example, coking coal prices. In the present organisation of the National Coal Board, we cannot expect to get the same level of prices throughout the country. Whether one should criticise that policy is another matter, which we are not discussing tonight.
Nevertheless, while I think that many of us would be prepared to accept some differentials, the magnitude of those differentials—whereby Colvilles, I understand, pay something like 30s. a ton more for coking coal than is paid by steel plants south of the Border—justifies that something has to be done about this. For that reason I sympathise with the purpose of the Amendment.
It is not only a question of coking coal. There are also electricity prices. Looking at the steel industry as a whole, I have for a long time believed that the method of assessing the plant of steel companies for rating purposes places an undue burden on those units of the steel industry. For a long time I have said that I would like to see a modification of that system while the rating system survives.
We would, however, be unwise to consider merely the specific question of Scotland when considering electricity charges, coal price differentials and the rating system, because we also have the general problem, which confronts Colvilles and all the other steel firms which will be taken into the public sector, that these firms and this public sector will be wanting to compete in European markets and in world markets.
We have a situation in which some of the European steel producers use cheap American coking coal. The German steel industry is facing a difficulty in that many of the German coal mines, which are privately owned and which are—

Mr. Speaker: Order. This is very interesting, but I am not sure that it comes within the scope of the Amendment.

Mr. O'Malley: I am trying, Mr. Speaker, to demonstrate that there is in the Amendment a problem of price differentials, as the hon. Member for


Cathcart has said. I am trying to suggest how to overcome that problem and how to reduce the difficulty, for example, which Colvilles faces both in its internal trading and in the export market. I will be brief and will try to keep in order, but perhaps you will tell me, Mr. Speaker, if I go out of order.
It seems to me that perhaps the best way in which the Government can assist Colvilles, and Scotland generally, is a way which would also assist the rest of the steel industry throughout the country. I do not want to see American coking coal brought into this country—[HON. MEMBERS: "Why not?"]—because I believe, first, that we should not spend foreign currency on it when we can produce British coal. Secondly, I think that we have a responsibility to the British coal mining industry, and I come from a mining area.
I think that in order to prevent this kind of price differential, and to help the Scottish steel industry and also the British steel industry generally, the Government would be well advised to consider the possibility—as is being done in Germany and in the E.C.S.C. countries which hon. Gentlemen opposite are so eager to join—of providing some kind of subsidy to our domestic steel industry so that there is not a differential in the export markets between our steel industry and foreign steel industries. This would help Colvilles and the Scottish steel industry. Obviously the level of subsidy will depend on the price differential if it exists as it does at the moment, and which the Scottish steel industry has to pay.
I hope that the Government will look carefully at the Amendment, because I believe that the hon. Gentleman is right. Colvilles and the steel industry generally are suffering an intolerable burden because of differential prices. Secondly, I think that by developing a policy to help Scotland the Government can develop a policy which will help the whole of the steel industry in its fight for export markets.

Sir G. Nabarro: It is nice to hear a Sassenach Member from the benches opposite supporting a Tory Amendment designed to bring increased prosperity to Scotland, for we sat through nearly 3,000 columns of HANSARD in Committee upstairs without hearing a Scottish voice

from the Government Benches. [An HON. MEMBER: "Shocking."] It is shocking. My only desire is that my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), when he leaves the precincts of the Palace of Westminster in the early hours of tomorrow morning, will record his magnificent speech this evening on a tape recorder and will send the tapes to the City of Glasgow so that they may be played in every street in the area of the Pollok by-election. If ever there was an epitome of "Scotland for ever" it was my hon. Friend's speech this evening.
This is not the first occasion on which I, a Sassenach Unionist Member, have intervened to support my hon. Friend, for he was talking good economic and financial sense this evening, as he did on so many occasions upstairs. He said at one point in his speech that Colvilles lost £2 million this year. I immediately declare my personal interest as a shareholder in Colvilles. I did not buy its shares at the high of 83s. each, I promise my hon. Friend. I bought them very satisfactorily, and I shall earn a profit on them, but I am sorry to see their decline in recent months, and the decline in Colvilles' prospects.
That is most largely due to three factors. The first is the price differential for coking coals north of the border, which greatly inflates the cost of production of Scottish steel. The second factor is the refusal of successive Governments to allow the import of American coking coal. I do not take the parochial view that every industry in Britain should use only British coal; that we should freely admit the import of oil, of manufactured goods, of food, and of a thousand different products, and yet deny entry to coal. Why? Simply to serve the interests of the coalmining lobby opposite and its innate sense of introverted loyalty to the mine-workers which is so misplaced today.
The third mistake was made by my own party, namely, to split that strip mill in two halves, one in South Wales and the other at Ravenscraig. All the big strip mills in the world built in the last few years are on a concentrated, high-production basis. This mill was split for party political reasons because the Welsh lobby of the party opposite protested loudly for a share in the new strip production. I


am glad to see the hon. Member for Bedwellty (Mr. Finch) grinning his support. He was one of the most vociferous Members who favoured taking part of the strip mill to South Wales, whereas it should have been all in one place, north of the Border at Ravenscraig.
Those are the three reasons which militate against economic competitiveness of Scottish steel today and which have caused a decline in its prospects. The right hon. Gentleman will know that in 1965 the output of the United Kingdom steel industry was about 27 million ingot tons. Of this, 2,743,000 ingot tons, or almost exactly 10 per cent., were produced north of the Border. The Benson Report confirms those figures, and tells us the companies involved. There was Bairds and Scottish, with sections and bars; Colvilles and all its works, with plate, heavy sections, bars and sheets; Lanarkshire, with heavy sections and bars, and Stewarts and Lloyds, at Clydesdale, with tubes and pipes.
At this stage it is very important for the Minister to proclaim his support for the system of non-discrimination against Scottish steel producers. We have had nationalised coal, nationalised gas and nationalised electricity—in the case of Scotland from bituminous coal and water power—and now we are to have nationalised steel; all four industries will be in public ownership north of the Border and all within the Ministerial prerogative of the right hon. Gentleman. Is he really, by default or negation, going to tell us this evening that he accepts the decline of the Scottish steel industry and, notwithstanding the prerogative being his, that he will do nothing to support the policy of non-discrimination against Scotland to which I have referred this evening?
Every Scottish Member opposite should be rising with warmth and enthusiasm

to support the policies that I have put to the House this evening. They should not emulate the example of their one Scottish colleague in Committee who was quiescent and sedentary from beginning to end, throughout the 3,000 weary columns of HANSARD. I hope that we shall have lots of speeches from Scottish Members this evening. [Interruption.] Are we not going to hear from the hon. Member for Dunbartonshire, East (Mr. Bence) this evening? No? Mark it up for the Pollok by-election. Are we not going to hear from any of the Scots coal miners—

Mr. Speaker: Order. Whether we are or not, as the hon. Member knows, he must speak to the Amendment.

10.30 p.m.

Sir G. Nabarro: Your patience and your toleration are greatly supported by myself, and I am deeply grateful to you, Mr. Speaker. I was merely acting as a trailer for the Pollok by-election, by trying to encourage Scottish Members to support me. As for the one English Member who supported me, the hon. Gentleman the Member for Rotherham (Mr. O'Malley) I hope that we shall find him in our Lobby this evening. I hope that he is not the sawdust Caesar of the steel debate. [Interruption.] I will not go into Purchase Tax because there is no Purchase Tax on steel. When the hon. Gentleman does his homework he will find that I voted against my own party on Purchase Tax for five years running, which is more than he has ever done.

Mr. Speaker: Order. There is nothing about Purchase Tax in the Bill.

Sir G. Nabarro: I was tempted Sir. With those few words I appeal to my hon. and right hon. Friends to support the magnificent policies enunciated by my hon. Friend the Member for Cathcart unless a satisfactory reply is received.

Mr. James Hamilton: We have now had our Sunday Night at the London Palladium a day late. We have all listened attentively to the hon. Gentlemen the Member for Worcestershire, South (Sir G. Nabarro). I would refer him to those 3,000 weary columns of HANSARD again. I was a member of the Standing Committee and I am sure he will discover that the hon. Member for Bothwell did speak during the sessions upstairs. He will also find that in the early hours of the morning the hon. Member for Bothwell was always there and the hon. Gentleman for Worcestershire, South was not.
Because I am concerned about the Scottish economy, I do not think that this is a time for levity. The hon. Gentleman has attempted to make this one of the many humourous occasions that we have when he gets to his feet. Rating has been mentioned by the hon. Gentleman the Member for Glasgow, Cathcart (Mr. Edward M. Taylor). It should to understood that in Scotland we have the derating Act in operation. In essence that means that all industrialists have a 50 per cent. relief. I am not putting that forward as a reason for failing to support the Amendment. I want to reinforce the point made by the hon. Gentleman the Member for Glasgow, Cathcart, when he said that the rates paid by Colvilles, notwithstanding the derating Act, are far in excess of those paid south of the Border.
It is quite true that we in Scotland are paying far more for gas and considerably more for electricity. I wish to give an example of how the gas industry is operating in Scotland. In my constituency we have a company making gas cookers, which are purchased by various regional gas boards. In spite of this, the Scottish consumer is paying more for them because the regional gas boards in Scotland are not competing with the other regions in the country. If this is to happen in the steel industry when it is nationalised, then obviously it will have a serious affect on the economy.

Mr. Burden: What has this got to do with what we are supposed to be discussing?

Mr. Deputy Speaker (Sir Eric Fletcher): I will stop the hon. Member when I think that he is out of order.

Mr. Hamilton: In Scotland we have one of the most modern steel mills in Europe. During the Christmas Recess I visited Ravenscraig. I also visited Stewarts and Lloyds. I met the directors, who told me that coking coal was costing them about 30s. per ton more. This differential was introduced by the former Conservative Government, although it is fair to point out that the present Government have increased the cost per ton by a further 10s. Because of this differential, I trust that my right hon. Friend the Minister of Power will bear in mind everything that has been said on this subject, remembering that Scotland is a development area and has high unemployment figures. I agree with the hon. Member for Worcestershire, South that we must do everything in our power to prevent the unemployment rate from increasing.

Sir G. Nabarro: I am grateful for the hon. Gentleman's support for my theme. May I, therefore, expect him to walk through my Lobby, holding my hand—[HON. MEMBERS: "Oh."]—so demonstrating Socialist support for good Unionist policy in this matter?

Mr. Hamilton: I do not think there is any chance of the hon. Gentleman and I going into the same Lobby at any time. I only hope that he will come to Pollok, so making the probable election of the Labour candidate a certainty.

Sir G. Nabarro: I have already identified myself with the Unionist candidate by putting 100 gns. on him to win; and I will win my bet.

Mr. Hamilton: One hundred guineas to the hon. Gentleman is like £1 million to many of my hon. Friends who, like me, come from a working-class constituency and represent working-class people.

Sir G. Nabarro: Oh, dear.

Mr. Hamilton: Whatever views the hon. Member for Worcestershire, South may hold, his hon. Friend the Member for Cathcart treated the Amendment seriously, appreciated the need to do something for Scotland's economy and


did not expect that his proposal would be treated with frivolity. I urge the Minister not, under any circumstances, to allow the Bill to go the same way in Scotland as gas, electricity and coal. While I would not under any circumstances vote against my Government—

Sir G. Nabarro: Ah.

Mr. Hamilton: —I urge the Minister to make voting for the Government easier by giving a categorical assurance that he will take note of what has been said about this matter and that he will do all he can in the interests of the economy of Scotland.

Mr. Alick Buchanan-Smith: It is a measure of the good sense of my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) that his Amendment has been supported not only on both sides of the House but on both sides of the Border. The speech of the hon. Member for Bothwell (Mr. James Hamilton), with his great experience of industry in the West of Scotland, has demonstrated how real this problem is.
We must be grateful to my hon. Friend the Member for Cathcart not only for the powerful way in which he moved the Amendment, but the way in which he commended it to the House. He spoke of the differential, not only as something carried on by the present Government, but as something introduced by the previous Government. He was entirely fair in his whole approach. He said that the extent of the differential in Scotland was not known or properly realised. This is true of the whole of Scotland in relation to England, but it also happens within Scotland. In the parts of Scotland which I represent there is a further differential to contend with on coal prices. This differential within Scotland itself is discriminating against areas which are in need of greater development.
It gives me particular pleasure to see in his place the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes), because I know that he will support me in what I shall say.

Mr. Hector Hughes: The hon. Member is suffering from a delusion. His argument has not persuaded me at all.

Mr. Buchanan-Smith: If the hon. and learned Member is not to support me I shall be extremely disappointed, because he is one of the first in this House to support the interests of the people and industries of Aberdeen and the surrounding countryside and it is in their interests that I intend to speak. In the north-east of Scotland and the Highlands we have this differential in relation to the nationalised industries which we do not wish to see repeated when the steel industry is nationalised.
In the north-east of Scotland, Aberdeen and the surrounding countryside we have a good share of engineering industry. We have a number of very enterprising firms which are getting orders not only from Scotland and the rest of Britain but for exports. If they are to suffer increased differentials on their raw materials coming from the South and at the same time have to contend with higher costs of transport when sending finished goods overseas and to the South, they will have greater discrimination made against them. Those firms in the north-east of Scotland and other parts away from the central belt show great enterprise in overcoming transport difficulties. Let us hope that in the steel industry we shall not have further differentials imposed which will make life more difficult for them than it is at present.
One of the disappointing things about this debate, as in the debate on Thursday when we discussed another Scottish Amendment, is that there is no Scottish Minister on the Government Front Bench to hear the arguments which are of particular relation to Scotland. I should have thought that a Scottish Minister would have made it his business to be on the Bench to hear those arguments. My hon. Friend the Member for Cathcart mentioned the high rate of unemployment in Scotland and the rate at which it is increasing. This and the lack of concern by Ministers makes us realise why we have this situation in Scotland today.
I was disappointed to hear the hon. Member for Bothwell say that while he supported the Amendment he could not


see his way to go into the Lobby with us tonight. What he said is exactly on the lines of what is said by Ministers when they are speaking in Scotland and in this House—when they do speak here, which is not very often. There is a great deal of heat but no power. It is power that we need to run the economy of Scotland, and that we are not getting from the present Government.

10.45 p.m.

Dr. Bray: The cause of regional development has been warmly pursued by this Government, carrying much further the measures which the Tory Government belatedly started to revive after neglecting the question for so long. It was 10 years before they even started to move on this front. The question of the means of support for regional development has occupied both major parties.
The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) dwelt on the higher cost of coal, coking coal, gas and rates to the Scottish steel industry. He said that he did not want a subsidy; he just wanted other parts of the country to bear some of the higher costs of production in Scotland. I do not see what purpose is served by mincing words. Both sides fully accept that it is necessary and right to support regional development and that this costs money. If we consider just industrial costs, without taking into account social costs, this means a subsidy.
The question is: should this subsidy be paid in the form of capital contributions—in investment grants? Should it be provided through direct services in industrial training? Should it be provided by priming the pump with advance factories? Should it be provided by diverting specific enterprises to development areas—as, for example, the motor industry and, indeed, Colvilles itself was diverted to Scotland? Or should it be provided by expecting the public sector of industry to distort its price structure so that the costs of production are not reflected in the price charged in those areas?
This question has been considered deeply by Governments from both parties. In regard to the method of support, they have agreed that it is not right to distort the price structure and to expect, for

example, steel producers on Tees-side, or in Rotherham, or in South Wales, to contribute specifically to the support of steel producers in Scotland—or, correspondingly, steel consumers.

Mr. Burden: There are systems by which there could be rationalisation of prices. The petrol companies have arranged a system whereby the prices are general practically over the whole country. There is no mystique about doing this.

Dr. Bray: The hon. Gentleman is misinformed about the costs of refining and distributing petrol in different parts of the country. He will find that where an oil company is a sole distributor the relationship between cost and price of petrol reflects the same consideration as in the steel industry. A study of the long papers the oil companies have written on their own cost systems in different parts of the country should convince the hon. Gentleman of this.
We have heard a number of speeches from hon. Members representing Scottish constituencies. This perhaps reflects the fact that there is a Scottish by-election pending.

Mr. Edward M. Taylor: Would the hon. Gentleman at least concede that I raised this point at least three times before the by-election became pending?

Dr. Bray: The hon. Gentleman is not the only Member—

Hon. Members: Withdraw.

Dr. Bray: There are also other regional development plans. We heard nothing of the problems of Wales or of the North-East.

Hon. Members: Withdraw.

Dr. Bray: The hon. Gentleman is known as a passionate advocate for Scotland. I am not sure that he is always an effective one.

Hon. Members: Withdraw.

Dr. Bray: Because he does not discriminate as to where he can achieve results. This is a question he should consider seriously. Per £1 of support, how many jobs can he best create in Scotland? Is it by an artificial method of support of steel prices, supported by higher steel prices or costs in other parts of the country or is it by investment


grants or by advance factories or by training facilities?
If the claim is made without any priorities for different methods of regional support, then the cause is less effectively presented than it might be. We have certainly a need to maintain the pressure towards regional development in Scotland as in Wales, the North-East and other development areas, not just for a year or two but for a very long time, while the substructure of the industry and the balance of industry are brought firmly into the twentieth century.
The hon. Member has on other occasions, as have hon. Members on this side of the House with equal eloquence and perhaps with as great effectiveness, advocated the development of more modern industries in Scotland which are more likely to expand in the future than perhaps some of the older industries. The Government have taken substantial steps to support the shipbuilding industry, but they have also supported the electronics industry. If the hon. Gentleman examines some of the developments, starting off round Edinburgh, today in the electronics industry, I think he will find here a return from money which is greater than the kind of money which he wants to spend in supporting steel prices.

Mr. Edward M. Taylor: Is the hon. Gentleman aware that the only thing that has happened in electronics in the last few weeks has been the cancellation of two major projects? Is he also aware that the major thing that has happened in shipbuilding in the last year has been the cancellation of the shipbuilding credit scheme? Is he suggesting that Scottish steel is expendable and that we should get some new factories instead? This is an outrageous argument.

Dr. Bray: I am suggesting that the development now taking place—for instance, the creation of the first regional computing centre in Edinburgh and the support of this by new public funds—is only one aspect of the highly discriminattory and selective approach that is necessary to get the greatest result possible for the economy from the necessarily limited amount of resources that can be made available in any one place.
The hon. Gentleman, in his pursuit of development in Scotland, has the

wholehearted support not only of all Scottish Members of Parliament but of the Government. He also in the cause of general regional development, as I say, has the support of the Welsh Members and the North-East Members, but this Amendment is not the way to do it. We have later in this Bill a Clause which sets out the financial objectives of the nationalised industries. No doubt we shall have a debate on this, as we had in Committee. Hon. Members opposite were insistent that the steel industry should be run on commercial lines with prices properly reflecting costs and responding to the demands of the market. If this is the way we are to run the steel industry, if through other methods we develop means of supporting regional economies, we will only confuse our aims. We will only work against the best interests of regional development if we pursue the kind of patchwork approach which is proposed in this Amendment.
I therefore urge my hon. Friends, while I am sure they will accept that the Government are wholehearted in their support of regional development, in turn to accept that this Amendment would divert important resources away from those areas in which they can most effectively be used.

Mr. Patrick Jenkin: The Parliamentary Secretary, in the course of what I can only call a very inadequate reply indeed, seemed to cast aspersions on the motives of my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) which I can only describe as unworthy. The Parliamentary Secretary to the Ministry of Technology sat through nearly three thousand columns of HANSARD in Standing Committee D and he will have heard my hon. Friend time and time again move Amendments and speak to Amendments designed to help the Scottish steel industry, as he rightly pointed out in the course of the intervention, long before there was any by-election in Pollok. For the Parliamentary Secretary to stand at the Dispatch Box and say that this Amendment, which was debated with force and supported on both sides of the House, has been inspired by that event is unworthy.

Dr. Bray: The first hon. Member to mention the Pollok by-election in the debate was the hon. Member for Worcestershire, South (Sir G. Nabarro), who gave


an admirable Scottish speech but forget the Macnamara's Band part.

Mr. Jenkin: The Parliamentary Secretary specifically accused my hon. Friend the Member for Glasgow, Cathcart of having this by-election in his mind, and that is quite wrong. My hon. Friend the Member for Worcestershire, South mentioned the by-election, but by that time the debate was open. My hon. Friend the Member for Cathcart has been tireless in promoting the interests of the Scottish steel industry, and in particular, as the hon. Member for Rotherham (Mr. O'Malley) will concede, has dealt with force and eloquence over and over again with the question of differential pricing by the nationalised industries in Scotland.

Mr. O'Malley: The hon. Gentleman is quite right in bringing to the attention of the House the fact that the hon. Member for Cathcart raised serious issues about Scotland. He has not pointed out that when frivolity crept into the Committee proceedings, it was frivolity

from that side of the Committee and not from this side, when the ex-Parliamentary Secretary spoke of a caravan for the headquarters of the National Steel Corporation when the hon. Member for Cathcart was arguing for the region.

Mr. Jenkin: I would remind the hon. Member for Rotherham that my hon. Friend the Member for Cathcart moved one of the new Clauses accepted by the Government on this issue. I believe that my hon. Friends who have spoken in support of this Amendment, and who were supported by hon. Members on both sides of the House, have put the arguments to the Government fairly, openly and squarely and they have not been answered. The reply given by the Parliamentary Secretary was ineluctably inadequate.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 205, Noes 247.

Division No. 244.]
AYES
[10.58 p.m.


Alison, Michael (Barkston Ash)
Crowder, F. P.
Heald, Rt. Hn. Sir Lionel


Allason, James (Hemel Hempstead)
Cunningham, Sir Knox
Heath, Rt. Hn. Edward


Astor, John
Currie, G. B. H.
Heseltine, Michael


Atkins, Humphrey (M't'n &amp; M'd'n)
Dalkeith, Earl of
Higgins, Terence L.


Awdry, Daniel
Dance, James
Hill, J. E. B.


Baker, W. H. K.
d'Avigdor-Goldsmid, Sir Henry
Hirst, Geoffrey


Barber, Rt. Hn. Anthony
Dean, Paul (Somerset, N.)
Hobson, Rt. Hn. Sir John


Batsford, Brian
Deedes Rt. Hn. W. F. (Ashford)
Hogg, Rt. Hn. Quintin


Beamish, Col. Sir Tufton
Digby, Simon Wingfield
Holland, Philip


Bell, Ronald
Doughty, Charles
Hooson, Emlyn


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Drayson, G. B.
Hordern, Peter


Berry, Hn. Anthony
du Cann, Rt. Hn. Edward
Hornby, Richard


Biffen, John
Eden, Sir John
Howell, David (Guildford)


Biggs-Davison, John
Elliot, Capt. Walter (Carshalton)
Hunt, John


Birch, Rt. Hn. Nigel
Elliott, R. W. (N'c"t1e-upon-Tyne, N.)
Hutchison, Michael Clark


Black, Sir Cyril
Eyre, Reginald
Iremonger, T. L.


Blaker, Peter
Farr, John
Irvine, Bryant Godman (Rye)


Body, Richard
Fisher, Nigel
Jenkin, Patrick (Woodford)


Bossom, Sir Clive
Fletcher-Cooke, Charles
Johnson Smith, G. (E. Grinstead)


Boyd-Carpenter, Rt. Hn. John
Forrest, George
Jones, Arthur (Northants, S.)


Boyle, Rt. Hn. Sir Edward
Fortescue, Tim
Jopling, Michael


Braine, Bernard
Foster, Sir John
Joseph, Rt. Hn. Sir Keith


Brinton, Sir Tatton
Galbraith, Hn. T. G.
Kerby, Capt. Henry


Brown, Sir Edward (Bath)
Giles, Rear-Adm. Morgan
Kimball, Marcus


Bruce-Gardyne, J.
Gilmour, Ian (Norfolk, C.)
King, Evelyn (Dorset, S.)


Bryan, Paul
Gilmour, Sir John (Fife, E.)
Kitson, Timothy


Buchanan-Smith, Alick (Angus, N &amp; M)
Glover, Sir Douglas
Knight, Mrs. Jill


Bullus, Sir Eric
Glyn, Sir Richard
Lambton, Viscount


Burden, F. A.
Godber, Rt. Hn. J. B.
Lancaster, Col. C. G.


Campbell, Gordon
Goodhart, Philip
Langford-Holt, Sir John


Carlisle, Mark
Gower, Raymond
Legge-Bourke, Sir Harry


Carr, Rt. Hn. Robert
Grant, Anthony
Lewis, Kenneth (Rutland)


Cary, Sir Robert
Grant-Ferris, R.
Lloyd, Ian (P'tsm'th, Langstone)


Channon, H. P. G.
Gresham Cooke, R.
Lloyd, Rt. Hn. Selwyn (Wirral)


Chichester-Clark, R.
Grieve, Percy
Longden, Gilbert


Clark, Henry
Griffiths, Eldon (Bury St. Edmunds)
Loveys, W. H.


Clegg, Walter
Gurden, Harold
Lubbock, Eric


Cooke, Robert
Hall, John (Wycombe)
MacArthur, Ian


Cooper-Key, Sir Neill
Hall-Davis, A. G. F.
Maclean, Sir Fitzroy


Cordle, John
Hamilton, Michael (Salisbury)
Maddan, Martin


Costain, A. P.
Harris, Reader (Heston)
Maginnis, John E.


Crawley, Aidan
Harrison, Col. Sir Harwood (Eye)
Marten, Neil


Crouch, David
Hastings, Stephen
Maude, Angus



Hawkins, Paul





Mawby, Ray
Peyton, John
Taylor, Frank (Moss Side)


Maxwell-Hyslop, R. J.
Pink, R. Bonner
Teeling, Sir William


Mills, Peter (Torrington)
Powell, Rt. Hn. J. Enoch
Temple, John M.


Mills, Stratton (Belfast, N.)
Price, David (Eastleigh)
Thatcher, Mrs. Margaret


Miscampbell, Norman
Prior, J. M. L.
Thorpe, Jeremy


Mitchell, David (Basingstoke)
Quennell, Miss J. M.
Turton, Rt. Hn. R. H.


Monro, Hector
Ramsden, Rt. Hn. James
van Straubenzee, W. R.


Morgan, Geraint (Denbigh)
Rawlinson, Rt. Hn. Sir Peter
Vaughan-Morgan, Rt. Hn. Sir John


Morrison, Charles (Devizes)
Rees-Davies, W. R.
Vickers, Dame Joan


Mott-Radclyffe, Sir Charles
Renton, Rt. Hn. Sir David
Walker, Peter (Worcester)


Munro-Lucas-Tooth, Sir Hugh
Ridley, Hn. Nicholas
Walker-Smith Rt. Hn. Sir Derek


Murton, Oscar
Ridsdale, Julian
Wall, Patrick


Nabarro, Sir Gerald
Rodgers, Sir John (Sevenoaks)
Walters, Dennis


Neave, Airey
Rossi, Hugh (Hornsey)
Weatherill, Bernard


Nicholls, Sir Harmar
Royle, Anthony
Wells, John (Maidstone)


Noble, Rt. Hn. Michael
Russell, Sir Ronald
Whitelaw, Rt. Hn. William


Nott, John
Scott, Nicholas
Wilson, Geoffrey (Truro)


Onslow, Cranley
Sharples, Richard
Wolrige-Gordon, Patrick


Orr, Capt. L. P. S.
Shaw, Michael (Sc'b'gh &amp; Whitby)
Wood, Rt. Hn. Richard


Orr-Ewing, Sir Ian
Sinclair, Sir George
Woodnutt, Mark


Osborn, John (Hallam)
Smith, John
Worsley, Marcus


Page, Graham (Crosby)
Steel, David (Roxburgh)
Wylie, N. R.


Page, John (Harrow, W.)
Stodart, Anthony
Younger, Hn. George


Pardoe, John
Summers, Sir Spencer



Pearson, Sir Frank (Clitheroe)
Taylor, Sir Charles (Eastbourne)
TELLERS FOR THE AYES:


Percival, Ian
Taylor, Edward M.(G'gow, Cathcart)
Mr Francis Pym and Mr Jasper More.




NOES


Abse, Leo
Dickens, James
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)


Albu, Austen
Dobson, Ray
Jones, J. Idwal (Wrexham)


Alldritt, Walter
Doig, Peter
Judd, Frank


Allen, Scholefield
Driberg, Tom
Kelley, Richard


Anderson, Donald
Dunn, James A.
Kenyon, Clifford


Archer, Peter
Dunnett, Jack
Kerr, Dr. David (W'worth, Central)


Armstrong, Ernest
Dunwoody, Mrs. Gwyneth (Exeter)
Lawson, George


Atkins, Ronald (Preston, N.)
Dunwoody, Dr. John (F'th &amp; C'b'e)
Leadbitter, Ted


Atkinson, Norman (Tottenham)
Edwards, William (Merioneth)
Lee, John (Reading)


Bagier, Gordon A. T.
Ellis, John
Lestor, Miss Joan


Barnes, Michael
English, Michael
Lever, Harold (Cheetham)


Barnett, Joel
Ennals, David
Lever, L. M. (Ardwick)


Beaney, Alan
Ensor, David
Lewis, Ron (Carlisle)


Bence, Cyril
Evans, Ioan L. (Birm'h'm, Yardley)
Lomas, Kenneth


Benn, Rt. Hn. Anthony Wedgwood
Fernyhough, E.
Loughlin, Charles


Bennett, James (G'gow, Bridgeton)
Finch, Harold
Luard, Evan


Bidwell, Sydney
Fletcher, Raymond (Ilkeston)
Lyon, Alexander W. (York)


Bishop, E. S.
Fletcher, Ted (Darlington)
Lyons, Edward (Bradford, E.)


Blackburn, F.
Foot, Sir Dingle (Ipswich)
McBride, Neil


Boardman, H.
Foot, Michael (Ebbw Vale)
McCann, John


Booth, Albert
Ford, Ben
MacColl, James


Boston, Terence
Fowler, Gerry
MacDermot, Niall


Boyden, James
Fraser, John (Norwood)
Macdonald, A. H.


Braddock, Mrs. E. M.
Freeson, Reginald
McKay, Mrs. Margaret


Bradley, Tom
Gardner, Tony
Mackenzie, Gregor (Rutherglen)


Bray, Dr. Jeremy
Garrett, W. E.
Mackie, John


Brooks, Edwin
Ginsburg, David
Mackintosh, John P.


Broughton, Dr. A. D. D.
Gourlay, Harry
Maclennan, Robert


Brown, Hugh D. (G'gow, Provan)
Gray, Dr. Hugh (Yarmouth)
McMillan, Tom (Glasgow, C.)


Brown, Bob (N'c'tle-upon-Tyne, W.)
Gregory, Arnold
McNamara, J. Kevin


Buchan, Norman
Griffiths, David (Rother Valley)
MacPherson, Malcolm


Buchanan, Richard (G'gow, Sp'burn)
Griffiths, Will (Exchange)
Mahon, Peter (Preston, S.)


Butler, Mrs. Joyce (Wood Green)
Hale, Leslie (Oldham, W.)
Mahon, Simon (Bootle)


Carmichael, Neil
Hamilton, James (Bothwell)
Mallalieu, E. L. (Brigg)


Carter-Jones, Lewis
Harper, Joseph
Mallalieu, J. P. W. (Huddersfield, E.)


Castle, Rt. Hn. Barbara
Harrison, Walter (Wakefield)
Manuel, Archie


Coe, Dennis
Hart, Mrs. Judith
Mapp, Charles


Coleman, Donald
Haseldine, Norman
Marquand, David


Concannon, J. D.
Hattersley, Roy
Marsh, Rt. Hn. Richard


Conlan, Bernard
Hazell, Bert
Mason, Roy


Craddock, George (Bradford, S.)
Henig, Stanley
Mayhew, Christopher


Crawshaw, Richard
Herbison, Rt. Hn. Margaret
Mellish, Robert


Cronin, John
Hobden, Dennis (Brighton, K'town)
Mendelson, J. J.


Crosland, Rt. Hn. Anthony
Hooley, Frank
Mikardo, Ian


Crossman, Rt. Hn. Richard
Horner, John
Millan, Bruce


Cullen, Mrs. Alice
Houghton, Rt. Hn. Douglas
Milne, Edward (Blyth)


Dalyell, Tam
Howell, Denis (Small Heath)
Mitchell, R. C. (S'th'pton, Test)


Davidson, Arthur (Accrington)
Howie, W.
Moonman, Eric


Davies, Dr. Ernest (Stretford)
Hughes, Rt. Hn. Cledwyn (Anglesey)
Morris, Alfred (Wythenshawe)


Davies, G. Elfed (Rhondda, E.)
Hughes, Roy (Newport)
Morris, John (Aberavon)


Davies, Harold (Leek)
Hynd, John
Moyle, Roland


Davies, Ifor (Gower)
Jackson, Colin (B'h'se &amp; Spenb'gh)
Murray, Albert


Delargy, Hugh
Jackson, Peter M. (High Peak)
Newens, Stan


Dell, Edmund
Jenkins, Hugh (Putney)
Noef-Baker, Rt. Hn. Philip (Derby, S.)


Dewar, Donald
Johnson, Carol (Lewisham, S.)
Norwood, Christopher


Diamond, Rt. Hn. John
Jones, Dan (Burnley)
Oakes, Gordon







Ogden, Eric
Robinson, Rt. Hn. Kenneth (St. P'c'as)
Urwin, T. W.


O'Malley, Brian
Robinson W. O. J. (Walth'stow, E.)
Varley, Eric G.


Oram, Albert E.
Rodgers, William (Stockton)
Wainwright, Edwin (Dearne Valley)


Orbach, Maurice
Roebuck, Roy
Wallace, George


Orme, Stanley
Rogers, George (Kensington, N.)
Watkins, David (Consett)


Oswald, Thomas
Rose, Paul
Weitzman, David


Owen, Dr. David (Plymouth, S'tn)
Ross, Rt. Hn. William
Wellbeloved, James


Owen, Will (Morpeth)
Rowland, Christopher (Meriden)
Wells William (Walsall N.)


Paget, R. T.
Ryan, John
Whitaker, Ben


Palmer, Arthur
Shaw, Arnold (Ilford, S.)
White, Mrs. Eirene


Pannell, Rt. Hn. Charles
Sheldon, Robert
Whitlock, William


Park, Trevor
Shore, Peter (Stepney)
Wigg, Rt. Hn. George


Parker, John (Dagenham)
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Willey, Rt. Hn. Frederick


Parkyn, Brian (Bedford)
Short, Mrs. Renée (W'hampton, N. E.)
Williams, Alan (Swansea, W.)


Pavitt, Laurence
Silkin, Rt. Hn. John (Deptford)
Williams, Alan Lee (Hornchurch)


Peart, Rt. Hn. Fred
Silverman, Julius (Aston)
Williams, Clifford (Abertillery)


Pentland, Norman
Silverman, Sydney (Nelson)
Williams Mrs. Shirley (Hitchin)


Perry, George H. (Nottingham, S.)
Slater, Joseph
Willis, George (Edinburgh, E.)


Price, Christopher (Perry Barr)
Small, William
Wilson, William (Coventry, S.)


Price, William (Rugby)
Spriggs, Leslie
Winnick, David


Randall, Harry
Steele, Thomas (Dunbartonshire, W.)
Woodburn, Rt. Hn. A.


Rankin, John
Stonehouse, John
Woof, Robert


Redhead, Edward
Strauss, Rt. Hn. G. R.
Yates, Victor


Reynolds, G. W.
Swingler, Stephen



Roberts, Albert (Normanton)
Taverne, Dick
TELLERS FOR THE NOES:


Roberts, Goronwy (Caernarvon)
Thomas, George (Cardiff, W.)
Mr Charles R. Morris and Mr Charles Grey.


Roberts, Gwilym (Bedfordshire, S.)
Thornton, Ernest



Robertson, John (Paisley)
Tinn, James

Mr. J. Bruce-Gardyne: I beg to move Amendment No. 30, in page 4, line 14, at the end to insert:
(c) to act, in its purchases or sales involving either imports or exports, in a manner consistent with the general principles of non-discriminatory treatment prescribed in the General Agreement on Tariffs and Trade for governmental measures affecting imports or exports by private traders and in particular that it and the publicly-owned companies shall make any such purchases or sales solely in accordance with commercial considerations, including price, quality, availability, marketability, transportation, and other conditions of purchase or sale.
I was sorely tempted to seek to intervene in the debate on the previous Amendment. But I was so impressed by the way in which my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) put it and argued his case that I felt that I would reserve my fire for this Amendment, the object of which is to ensure that the Government accept, on behalf of the Corporation, the clear obligation laid upon them by Article XVII of the G.A.T.T.
I shall read two brief extracts from Article XVII to explain the point. It is laid down in paragraph 1(a) of that Article that:
Each contracting party undertakes that if it establishes or maintains a state enterprise, wherever located,…such enterprise shall, in its purchases or sales involving either imports or exports, act in a manner consistent with the general principles of non-discrinimatory treatment prescribed in this Agreement for governmental measures affecting imports or exports by private traders.

Paragraph 1(b) explains that that means that such enterprises—that is, state enter-prises—
…shall,…make any such purchases or sales solely in accordance with commercial considerations, including price, quality, availability, marketability, transportation and other conditions of purchase or sale,…
This is very much the wording of the Amendment.
It may well seem essential that, when we are discussing this Clause, an obligation should be placed upon the Government to observe this Article of the G.A.T.T. In the Clause, there is a general ban on discriminatory activities by the Corporation in its handling of iron and steel products but the Amendment goes a great deal wider and covers, in relation to imports and exports, all the products which were enumerated by my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) in Standing Committee on 10th November. I shall not read them out because I think that the Minister is well aware of the very wide range of products to which this refers.
The Government must surely accept the Amendment, for they cannot afford at this moment to give the impression that they regard any of their international obligations lightly. Since the Government came to power, the phrase "Britannia waives the rules" has become a cliché of international diplomacy—and a pretty deplorable cliché. It has become all too widely accepted that the Government will dishonour their obligations one by one.
The export rebate scheme has always been very doubtful in relation to the G.A.T.T. The fact that the Government accepted that the scheme should be abandoned on exports to the E.F.T.A. countries seemed almost an acknowledgment that it was, in fact, in breach of the G.A.T.T. There is no question that the imports surcharge was in flagrant and open breach of the G.A.T.T.—regrettably for no less than two years.
It is our experience that the Government take their obligations under the G.A.T.T. remarkably lightly. In Strasbourg today, the Prime Minister is reported to have said that
Those rules to which we set our name seal —these rules we will observe.
This is a statement which, I imagine, must have made the halls of the Council of Europe ring with hollow laughter from the experience that other Governments have had in dealing with the Government and the way they observe their international obligations.
I do not want to go into this Amendment at length, because it is clear that if the Government accept their obligations under the G.A.T.T., they will feel bound to accept it, and I trust that that is what we shall hear from the Parliamentary Secretary now. At a time when we are seeking to join the Common Market, and after the rather distressing reply we had from the Minister last Thursday, when we urged him to impose on the Corporation tax the obligation to consult under our agreement with the European Coal and Steel Community, it is doubly important that the Government should recognise all those international obligations incumbent upon them to observe. In a matter of this kind, first and foremost it is an obligation towards the G.A.T.T. On that basis, I trust that we shall have an unequivocal acceptance of the Amendment.

11.15 p.m.

Mr. Freeson: May I first say that for a party which has presumed on so many occasions in the past for so many years to describe itself, and to seek to get public approval, as a patriotic party, the party opposite—or some of its members —seem to favour far too often these cheap sneers and gibes of the kind we have

just heard from the hon. Member for South Angus (Mr. Bruce Gardyne).

Mr. Bruce-Gardyne: rose—

Mr. Freeson: No, I am not giving way for the moment. It seems to me that hon. Members on the other side, or some of them, are content to make this kind of sneer and attack this side of the House but do not like it when just occasionally—not very frequently—we answer them. I am going to deal with this point for a moment, and I do not have to be patronisingly spoken to by the hon. Member on the other side.
I want to make this point quite clear. We quite rightly resent and reject the kind of sneers we had coming from the hon. Member for South Angus when he referred to our treating international obligations lightly, and when he said that the international slogan had now become "Britannia waives the rules", and the like kind of comment. When this kind of statement is made it is the perfect right of hon. Members on this side to stand up and reject it, and that is what I am seeking to do.
I now wish to deal with the actual content of the Amendment, and perhaps surprisingly, in view of my strictures just now, to say that we do in fact sympathise very much with the purpose of the Amendment. But that is not to say that it is necessary to have it written into the Bill.
The Government, on behalf of the country, are parties to G.A.T.T., and it goes without saying that they will continue to meet their obligations under that Agreement, including their obligations under Article 17 upon which it appears to us that this Amendment is based, or very largely worded. And it will be our intention, as it has been in the past, to see that the nationalised industries comply with the terms of the Agreement as well. It will be so with the nationalised steel industry as it has been with the other nationalised industries which are required to act in conformity with Article 17.
So far as I am aware, there have been no complaints at all about the conduct of the nationalised industries in regard to G.A.T.T. in the past, and it seems therefore that there are no grounds for assuming that it is necessary to write specifically into this Bill a requirement


which the Government accepts on behalf of the country.
There is general sympathy, obviously, with the purpose of the Amendment. If there was not we should not continue as members of the G.A.T.T. and in full support of it. It would, however, be inappropriate to put such a provision into the Bill because there is no corresponding provision in any other legislation affecting the nationalised industries, and to put it into the Bill might cause doubt about how these other industries—apart—from steel—comply with G.A.T.T. Secondly, such a provision would or could imply that our other international obligations, such as under E.F.T.A. for example, which were not written into the Bill, are of less importance than the ones specifically referred to in the Amendment.
We have no objection to the purpose of the Amendment, but we see no point in having it written into the Bill and no need to do so.

Mr. Barber: I am astonished at the behaviour of the hon. Gentleman—[HON. MEMBERS: "Hear, hear."] It is —[HON. MEMBERS: "Shocking."]—it is the custom—Does the hon. Gentleman want to interrupt when I am on my feet? I will willingly give way if he wishes to make a point.

Mr. Freeson: Yes. May I say again to the right hon. Gentleman that if hon. Members on his side of the House, including himself, presume to interrupt and to be offensive in their language they should not attack hon. Members on this side if occasionally we react: they must expect us to do so.

Mr. Barber: I would have thought that the hon. Gentleman had been long enough in this House to have learned that it is the custom to give way when an hon. or right hon. Member on one

of the Front Benches seeks to intervene, unless there has been a considerable number of interventions. He will learn in time how to behave in this House [HON. MEMBERS: "Perhaps."]—or else he will find, if he continues in this manner, the sole consequence of which is to keep his hon. Friends behind him up later in the night, that he will jolly soon be moved from the Labour Government.

How did he have the audacity to attack in the terms that he did the complaints concerning the G.A.T.T.? Has he never heard of the surcharge referred to by my hon. Friend? Does he not know that the Government of which he is now a loyal member deliberately set out to breach the G.A.T.T.? He did not answer my hon. Friend's question about that. Perhaps he does not know anything about it. Or perhaps, now he is on the Front Bench, he is going to toe the party line the whole time, so long as he remains Parliamentary Secretary to the Ministry of Power. This is not the way to behave. My hon. Friend made a perfectly reasonable and respectable case for this Amendment. It may be arguable whether it is appropriate to insert these words into this Bill, but certainly we got from the hon. Gentleman no argument on the merits. His was a really appalling and, if I may say so, wholly ineffective reply.

As the result of the way he behaved he has now added to the time his hon. Friends will remain here this evening another quarter of an hour. As a direct result of the attitude adopted by him, Members of the Labour Party, in the Tea Room or elsewhere in this building, will still be here a little bit longer, because I advise my hon. Friends to vote for the Amendment.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 206, Noes 248.

Division No. 245.]
AYES
[11.22 p.m.


Alison, Michael (Barkston Ash)
Biggs-Davison, John
Buchanan-Smith, Alick (Angus, N&amp;M)


Allason, James (Hemel Hempstead)
Birch, Rt. Hn. Nigel
Bullus, Sir Eric


Astor, John
Black, Sir Cyril
Burden, F. A.


Atkins, Humphrey (M't'n &amp; M'd'n)
Blaker, Peter
Campbell, Gordon


Awdry, Daniel
Body, Richard
Carlisle, Mark


Baker, W. H. K.
Bossom, Sir Clive
Carr, Rt. Hn. Robert


Barber, Rt. Hn. Anthony
Boyd-Carpenter, Rt. Hn. John
Cary, Sir Robert


Batsford, Brian
Boyle, Rt. Hn. Sir Edward
Channon, H. P. G.


Beamish, Col. Sir Tufton
Braine, Bernard
Chichester-Clark, R.


Bell, Ronald
Brinton, Sir Tatton
Clark, Henry


Bennett, Dr. Reginald (Cos. &amp; Fhm)
Brown, Sir Edward (Bath)
Clegg, Walter


Berry, Hn. Anthony
Bruce-Gardyne, J.
Cooke, Robert


Biffen, John
Bryan, Paul
Cordle, John




Costain, A. P.
Hunt, John
Peyton, John


Crawley, Aidan
Hutchison, Michael Clark
Pink, R. Bonner


Crouch, David
Iremonger, T. L.
Powell, Rt. Hn. J. Enoch


Crowder, F. P.
Irvine, Bryant Godman (Rye)
Price, David (Eastleigh)


Currie, G. B. H.
Jenkin, Patrick (Woodford)
Prior, J. M. L.


Dalkeith, Earl Of
Johnson Smith, G. (E. Grinstead)
Pym, Francis


Dance, James
Jones, Arthur (Northants, S.)
Quennell, Miss J. M.


d'Avigdor-Goldsmid, Sir Henry
Jopling, Michael
Ramsden, Rt. Hn. James


Dean, Paul (Somerset, N.)
Joseph, Rt. Hn. Sir Keith
Rawlinson, Rt. Hn. Sir Peter


Deedes, Rt. Hn. W. F. (Ashford)
Kerby, Capt. Henry
Rees-Davies, W. R.


Digby, Simon Wingfield
Kimball, Marcus
Renton, Rt. Hn. Sir David


Doughty, Charles
King, Evelyn (Dorset, S.)
Ridley, Hn. Nicholas


Drayson, G. B.
Kitson, Timothy
Ridsdale, Julian


du Cann, Rt. Hn. Edward
Knight, Mrs. Jill
Rodgers, Sir John (Sevenoaks)


Eden, Sir John
Lambton, Viscount
Rossi, Hugh (Hornsey)


Elliot, Capt. Walter (Carshalton)
Lancaster, Col. C. G.
Royle, Anthony


Elliott, R. W.(N 'c'tle-upon-Tyne, N.)
Langford-Holt, Sir John
Russell, Sir Ronald


Eyre, Reginald
Legge-Bourke, Sir Harry
Scott, Nicholas


Farr, John
Lewis, Kenneth (Rutland)
Sharples, Richard


Fisher, Nigel
Lloyd, Ian (P'tsm'th, Langstone)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Fletcher-Cooke, Charles
Longden, Gilbert
Sinclair, Sir George


Fortescue, Tim
Loveys, W. H.
Smith, John


Foster, Sir John
Lubbock, Eric
Stainton, Keith


Galbraith, Hn. T. G.
MacArthur, Ian
Steel, David (Roxburgh)


Giles, Rear-Adm. Morgan
Maclean, Sir Fitzroy
Stodart, Anthony


Gilmour, Ian (Norfolk, C.)
Macmillan, Maurice (Farnham)
Summers, Sir Spencer


Gilmour, Sir John (Fife, E.)
Maddan, Martin
Taylor, Sir Charles (Eastbourne)


Glover, Sir Douglas
Maginnis, John E.
Taylor, Edward M. (G'gow, Cathcart)


Glyn, Sir Richard
Marples, Rt. Hn. Ernest
Taylor, Frank (Moss Side)


Godber, Rt. Hn. J. B.
Marten, Neil
Teeling, Sir William


Goodhart, Philip
Maude, Angus
Temple, John M.


Gower, Raymond
Mawby, Ray
Thatcher, Mrs. Margaret


Grant-Ferris, R.
Maxwell-Hyslop, R. J.
Thorpe, Jeremy


Gresham Cooke, R.
Mills, Peter (Torrington)
Tilney, John


Grieve, Percy
Mills, Stratton (Belfast, N.)
Turton, Rt. Hn. R. H.


Griffiths, Eldon (Bury St. Edmunds)
Miscampbell, Norman
van Straubenzee, W. R.


Gurden, Harold
Monro, Hector
Vaughan-Morgan, Rt. Hn. Sir John


Hall, John (Wycombe)
More, Jasper
Vickers, Dame Joan


Hall-Davis, A. G. F.
Morgan, Geraint (Denbigh)
Walker, Peter (Worcester)


Hamilton, Michael (Salisbury)
Morrison, Charles (Devizes)
Walker-Smith, Rt. Hn. Sir Derek


Harris, Reader (Heston)
Mott-Radclyffe, Sir Charles
Wall, Patrick


Harrison, Col. Sir Harwood (Eye)
Munro-Lucas-Tooth, Sir Hugh
Walters, Dennis


Hastings, Stephen
Murton, Oscar
Weatherill, Bernard


Hawkins, Paul
Nabarro, Sir Gerald
Wells, John (Maidstone)


Heald, Rt. Hn. Sir Lionel
Neave, Airey
Whitelaw, Rt. Hn. William


Heath, Rt. Hn. Edward
Nicholls, Sir Harmar
Wilson, Geoffrey (Truro)


Heseltine, Michael
Noble, Rt. Hn. Michael
Wolrige-Gordon, Patrick


Higgins, Terence L.
Nott, John
Wood, Rt. Hn. Richard


Hill, J. E. B.
Onslow, Cranley
Woodnutt, Mark


Hirst, Geoffrey
Orr, Capt. L. P. S.
Worsley, Marcus


Hobson, Rt. Hn. Sir John
Orr-Ewing, Sir Ian
Wylie, N. R.


Hogg, Rt. Hn. Quintin
Osborn, John (Hallam)
Younger, Hn. George


Holland, Philip
Page, Graham (Crosby)



Hooson, Emlyn
Page, John (Harrow, W.)
TELLERS FOR THE AYES:


Hordern, Peter
Pardoe, John
Mr Anthony Grant and Mr David Mitchell.


Hornby, Richard
Pearson, Sir Frank (Clitheroe)



Howell, David (Guildford)
Percival, Ian





NOES


Abse, Leo
Bray, Dr. Jeremy
Davies, Harold (Leek)


Albu, Austen
Brooks, Edwin
Davies, Ifor (Gower)


Alldritt, Walter
Broughton, Dr. A. D. D.
Delargy, Hugh


Allen, Scholefield
Brown, Hugh D. (G'gow, Provan)
Dell, Edmund


Anderson, Donald
Brown, Bob (N'c'tle-upon-Tyne, W.)
Dewar, Donald


Archer, Peter
Buchan, Norman
Diamond, Rt. Hn. John


Armstrong, Ernest
Buchanan, Richard (G'gow, Sp'burn)
Dickens, James


Atkins, Ronald (Preston, N.)
Butler, Mrs. Joyce (Wood Green)
Dobson, Ray


Atkinson, Norman (Tottenham)
Carmichael, Neil
Doig, Peter


Bagier, Gordon A. T.
Carter-Jones, Lewis
Driberg, Tom


Barnes, Michael
Castle, Rt. Hn. Barbara
Dunn, James A.


Barnett, Joel
Coe, Denis
Dunnett, Jack


Beaney, Alan
Coleman, Donald
Dunwoody, Mrs. Gwyneth (Exeter)


Bence, Cyril
Concarron, J. D.
Dunwoody, Dr. John (F'th &amp; C'b'e)


Benn, Rt. Hn. Anthony Wedgwood
Conlan, Bernard
Eadie, Alex


Bennett, James (G'gow, Bridgeton)
Craddock, George (Bradford, S.)
Edwards, William (Merioneth)


Bidwell, Sydney
Crawshaw, Richard
Ellis, John


Bishop, E. S.
Cronin, John
English, Michael


Blackburn, F.
Crosland, Rt. Hn. Anthony
Ennals, David


Boardman, H.
Crossman, Rt. Hn. Richard
Ensor, David


Booth, Albert
Cullen, Mrs. Alice
Evans, Ioan L. (Birm'h'm, Yardley)


Boston, Terence
Dalyell, Tam
Fernyhough, E.


Boyden, James
Davidson, Arthur (Accrington)
Finch, Harold


Braddock, Mrs. E. M.
Davies, Dr. Ernest (Stretford)
Fletcher, Raymond (Ilkeston)


Bradley, Tom
Davies, G. Elfed (Rhondda, E.)
Fletcher, Ted (Darlington)







Foot, Sir Dingle (Ipswich)
Lyons, Edward (Bradford, E.)
Reynolds, G. W.


Foot, Michael (Ebbw Vale)
McCann, John
Roberts, Albert (Normanton)


Ford, Ben
MacColl, James
Roberts, Goronwy (Caernarvon)


Fowler, Gerry
MacDermot, Niall
Roberts, Gwilym (Bedfordshire, S.)


Fraser, John (Norwood)
Macdonald, A. H.
Robertson, John (Paisley)


Freeson, Reginald
McKay, Mrs. Margaret
Robinson, Rt. Hn. Kenneth (St. P'c'as)


Gardner, Tony
Mackenzie, Gregor (Rutherglen)
Robinson, W. O. J. (Walth'stow, E.)


Garrett, W. E.
Mackie, John
Rodgers, William (Stockton)


Gimburg, Duvid
Mackintosh, John P.
Roebuck, Roy


Gourlay, Harry
Maclennan, Robert
Rogers, George (Kensington, N.)


Gray, Dr. Hugh (Yarmouth)
McMillan, Tom (Glasgow, C.)
Rose, Paul


Gregory, Arnold
McNamara, J. Kevin
Ross, Rt. Hn. William


Grey, Charles (Durham)
MacPherson, Malcolm
Rowland, Christopher (Meriden)


Griffiths, David (Rother Valley)
Mahon, Peter (Preston, S.)
Ryan, John


Griffiths, Will (Exchange)
Mahon, Simon (Bootle)
Shaw, Arnold (Ilford, S.)


Hamilton, James (Bothwell)
Mallalieu, E. L. (Brigg)
Sheldon, Robert


Harper, Joseph
Mallalieu, J. P. W.(Huddersfield, E.)
Shore, Peter (Stepney)


Harrison, Walter (Wakefield)
Manuel, Archie
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)


Hart, Mrs. Judith
Mapp, Charles
Short, Mrs. Renée (W'hampton, N. E.)


Haseldine, Norman
Marquand, David
Silkin, Rt. Hn. John (Deptford)


Hattersley, Roy
Marsh, Rt. Hn. Richard
Silverman, Julius (Aston)


Hazell, Bert
Mason, Roy
Silverman, Sydney (Nelson)


Healey Rt. Hn. Denis
Mayhew, Christopher
Slater, Joseph


Henig, Stanley
Mellish, Robert
Small, William


Herbison, Rt. Hn. Margaret
Mendelson, J. J.
Spriggs, Leslie


Hobden, Dennis (Brighton, K'town)
Mikardo, Ian
Steele, Thomas (Dumbartonshire, W.)


Hooley, Frank
Millan, Bruce
Strauss, Rt. Hn. G. R.


Horner, John
Milne, Edward (Blyth)
Swingler, Stephen


Houghton, Rt. Hn. Douglas
Mitchell, R. C. (S'th'pton, Test)
Taverne, Dick


Howell, Denis (Small Heath)
Moonman, Eric
Thomas, George (Cardiff, W.)


Howie, W.
Morris, Alfred (Wythenshawe)
Thornton, Ernest


Hughes, Rt. Hn. Cledwyn (Anglesey)
Morris, John (Aberavon)
Tinn, James


Hughes, Roy (Newport)
Moyle, Roland
Urwin, T. W.


Hunter, Adam
Murray, Albert
Varley, Eric G.


Hynd, John
Newens, Stan
Wainwright, Edwin (Dearne Valley)


Jackson, Colin (B'h'se &amp; Spenb'gh)
Noel-Baker, Rt. Hn. Philip (Derby, S.)
Wallace, George


Jackson, Peter M. (High Peak)
Norwood, Christopher
Watkins, David (Consett)


Jenkins, Hugh (Putney)
Oakes, Gordon
Weitzman, David


Jenkins, Rt. Hn. Roy (Stechford)
Ogden, Eric
Wellbeloved, James


Johnson, Carol (Lewisham, S.)
O'Malley, Brian
Wells, William (Walsall, N.)


Jones, Dan (Burnley)
Oram, Albert E.
Whitaker, Ben


Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Orbach, Maurice
White, Mrs. Eirene


Jones, J. Idwal (Wrexham)
Orme, Stanley
Whitlock, William


Judd, Frank
Oswald, Thomas
Wigg, Rt. Hn. George


Kelley, Richard
Owen, Dr. David (Plymouth, S'tn)
Willey, Rt. Hn. Frederick


Kenyon, Clifford
Owen, Will (Morpeth)
Williams, Alan (Swansea, W.)


Kerr, Dr. David (W'worth, Central)
Paget, R. T.
Williams, Alan Lee (Hornchurch)


Lawson, George
Palmer, Arthur
Williams, Clifford (Abertillery)


Leadbitter, Ted
Park, Trevor
Williams, Mrs. Shirley (Hitchin)


Ledger, Ron
Parker, John (Dagenham)
Willis, George (Edinburgh, E.)


Lee, John (Reading)
Parkyn, Brian (Bedford)
Wilson, William (Coventry, S.)


Lestor, Miss Joan
Peart, Rt. Hn. Fred
Winnick, David


Lever, Harold (Cheetham)
Pentland, Norman
Woodburn, Rt. Hn. A.


Lever, L. M. (Ardwick)
Perry, George H. (Nottingham, S.)
Woof, Robert


Lewis, Ron (Carlisle)
Price, Christopher (Perry Barr)
Yates, Victor


Lomas, Kenneth
Price, William (Rugby)
TELLERS FOR THE NOES:


Loughlin, Charles
Randall, Harry
Mr Charles R. Morris and Mr Neil McBride


Luard, Evan
Rankin, John



Lyon, Alexander W. (York)
Redhead, Edward

11.30 p.m.

Mr. Deputy Speaker (Sir Eric Fletcher): I understand that Amendment No. 31 is not being moved. The next Amendment, therefore, is No. 32.

Mr. Patrick Jenkin: I beg to move, Amendment No. 32, in page 4, line 32, at the end to insert:
(2) If any person mentioned in paragraph (a) of subsection (1) of this section is dissatisfied with the manner in which the Corporation are carrying out their duty under paragraph (b) of the said subsection (1) he may by notice in writing complain to the Minister specifying the reasons why he is dissatisfied. If it appears to the Minister that such person has reasonable grounds for such complaint, the Minister shall, within twenty-one days of the receipt of such notice

(and after consulting with any organisation appearing to him to be representative of the interests of the person so complaining), give to that person an opportunity of appearing, either personally or by his representative, before a person appointed by the Minister, and if he avails himself of that opportunity, the Minister shall consider the report of the person so appointed and shall furnish the person so complaining with a copy of such report, before adjudicating upon the said notice. If the Minister is satisfied that the Corporation have failed to carry out their said duty he may, by notice to the Corporation, make such order as he shall think just and the Corporation shall give effect to such order.
There are a number of points in the Bill where the Minister has reserved to himself powers to judge the enforcement of any provisions which may be dealt


with, and he has so far resolutely refused to as it were delegate any of those powers to any impartial body, or even to grant a right of appeal. We have had a series of Amendments, both in Committee and on Report, seeking to set up an arbitration tribunal to deal with disputes which might arise between the Corporation and the private sector of the industry, or between the private sector and the Minister, and so far the right hon. Gentleman has gone no way to meet that case.
However, on one matter the Minister has written into the Bill a procedure for dealing with one aspect where the private sector might well come into conflict with him. Under Clause 13, which deals with the Minister's power to supervise and control the investment plans of the private sector, the right hon. Gentleman has instituted a procedure whereby a private company seeking to make an investment may ask to have its case heard by a person appointed by the Minister, and the Minister will consider that person's report, and indeed under an Amendment which the right hon. Gentleman has tabled he undertakes to make a copy of the report available to the private firm which has complained.
This Clause imposes on the Corporation a duty which may be every bit as important to the survival of the private sector as is the power contained in Clause 13 to deal with investments. The duty imposed on the Corporation under this Clause—and we have considered it—is not to show undue preference or to exercise unfair discrimination. Subsection (3) provides that this duty shall in no way be enforceable at law.
It is therefore left purely to the Corporation—presumably subject to the Minister's general oversight—to observe this duty and avoid discrimination against any of its customers, including the private sector. The private sector regards this as a very unsatisfactory setup. It feels that it will be at the mercy of the Corporation, which will have 90 per cent. of the capacity for making steel, and will have no effective way of ensuring that the Corporation fulfils the duty placed upon it by subsection (1,b).
The Amendment seeks to import into the Clause the same procedure that the Minister has seen fit to import into Clause 13. It does no more and no less.

The Minister ought to consider the Amendment with some sympathy. There must be some form of procedure whereby firms which consider they are being discriminated against can bring their complaints to the notice of the Minister, who can then investigate them and, if he finds them proven, can give a direction to the Corporation to desist.
A substantial part of the private sector consists of rerollers—firms which do not themselves manufacture steel but buy steel in a semi-finished form, as billets or something of that sort, and then re-roll it to make rod, or tube, or whatever it might be, then competing with the public sector—which not only makes the billets but undertakes the rerolling functions. The fear of private companies and rerollers is that they will not be able to buy their raw materials—and for them the semi-finished products are their raw materials—on the same terms that the integrated steel firms will be able to supply down the line to their subsidiaries engaged in the same trade.
The Minister has said that it is his desire that there shall be a healthy, prosperous and viable private sector, and has gone some way—especially with regard to statistics—to give an earnest of that intention. Here is another opportunity for him. If he wishes to satisfy the rerollers that he intends that the duty to avoid undue discrimination and undue preference by the Corporation is a duty to which that Corporation will be held, it is incumbent upon him to import into the Bill a procedure whereby private companies who feel that they are being discriminated against may bring the fact to his attention and have their complaints dealt with.
I do not see why the Minister should be reluctant to accept the Amendment. The drafting may not be adequate, in which case he will no doubt give an undertaking to introduce an Amendment having a similar effect in another place. But he must be left in no doubt that this is an Amendment which the private sector regards as important. In Committee we tried to do this by setting up an arbitration tribunal, but the Minister made it clear that he was not prepared to surrender his right to be the arbiter in this matter. We, as a party, although we disliked it, accepted it. The Amendment in no way interferes with the Minister's


ultimate right to be the arbiter; it establishes a procedure of a semi-formal nature whereby the private sector has some right it of access to the Minister and some opportunity to spell out its complaints and make sure the Minister is aware of its case.
This is a very reasonable Amendment, and is one to which the private sector is fully entitled, if the Minister is genuine—as I am certain he is—in his desire to ensure that the private sector prospers and has an independent existence.

Sir D. Glover: The argument put forward by my hon. Friend is irrefutable and the Government, by the very fact that they are leaving 10 per cent. of the industry in private hands, presumably expect that 10 per cent. to have a future. At the same time one cannot leave out the human emotions of that 10 per cent. which is very worried as to what its future will be, dealing alongside a great giant, controlling 90 per cent. of the industry. In common courtesy the very least that they can expect is that the Government should give them the right, if they feel that they are being discriminated against, to say so to the Government through procedures written into the Bill.
My hon. Friend talked about rerolling. Suppose that there is a boom in re-rolling and suppose that the Corporation has under-estimated demand. It would be quite possible for the nationalised part of the industry to deprive the 10 per cent. of any material for rerolling. Under these conditions the right hon. Gentleman ought to agree that there should be some procedure whereby the 10 per cent. can go to him and show that this discrimination exists.
We hope that it will not happen and that under the new Corporation the amount of material required for re-rolling will be plentiful for both private and public sectors. In all fairness, the Minister ought to accept this Amendment because there is bound to be this suspicion that if the crunch comes, if there is an excessive demand, then the 10 per cent. of free enterprise companies will be deprived of their supplies. Unless a procedure is written into the Bill to avoid this, there will be even more suspicion on this score. I do ask the right hon. Gentleman, even now, to

accept this Amendment, which has common-sense and fairness on its side.

Mr. J. H. Osborn: This is an issue with which I have already been concerned. The Minister referred to the problem in Standing Committee and said that he accepted that:
…the matter…arises out of a degree of real fear or real worry on the part of the private sector of the industry.
He went on:
I met representatives of it and discussed this problem with them some time ago.
He continued by saying that the fears were heavily exaggerated in Committee:
They sound far more dramatic and emotional here than when I heard them from people in the industry.
Later he said:
Perhaps I can make the point a little clearer. We are talking here about discretionary powers, rightly or wrongly conferred upon the Minister by Parliament.
Then he went on to say that the Minister acts under an Act of Parliament:
…which has conferred discretionary powers on him. One cannot make the exercise of those discretionary powers subject to an outside body unaccountable to Parliament."—[OFFICIAL REPORT. Standing Committee D, 30th November, 1966; c. 1542–6.]
When we were talking about a tribunal, the Minister said that appeals of this kind should be debated in Parliament. I cited one example. A debate in Parliament about a wrong decision by a Minister is too late. The damage has been done. I quoted one example to show how, under the Bill as drafted, a debate in Parliament might take place too late to redress something that had gone wrong.
11.45 p.m.
The real question is this: what portion of the private sector will be dependent on the private sector for, say, billets, ingots and cogging in the initial stages of ingots? If there is one set of prices for the public sector and another for the private sector, and the private sector complains, there must be some means of redressing that complaint.
It seems that the Minister genuinely desires that there should be a strong private sector, although it will be only 7 per cent. of the industry. If something goes wrong it will probably occur without the knowledge of the right hon. Gentleman. If something happens which un-


fairly favours the 93 per cent. against the 7 per cent. it will be drawn to his attention if there is an independent body or an inspector—the Amendment suggests an outside agency—which will look into these matters. Having rejected the tribunal idea, I trust that the Minister will now sympathetically consider the Amendment, and so meet some of the worries facing the private sector.

Mr. Marsh: rose—[Interruption.]

Mr. Deputy Speaker (Mr. Sydney Irving): Order. Mr. Shaw.

Mr. Michael Shaw: I support the Amendment and—

Sir D. Glover: On a point of order. Should not you reprimand the Minister for the way in which he sought to attract your attention, Mr. Deputy Speaker?

Mr. Deputy Speaker: Happily I did not happen to see it.

Mr. Shaw: Neither did I.
Most hon. Members have so far concentrated in this discussion on the question of prices. If there is to be discrimination, it is more likely to be concerned with supplies. This industry is subject to good and bad times, from the supply point of view, and, when times are good, delivery dates immediately lengthen. Calculations must be made about delivery dates and manufacturers are, to a great extent, reliant on their suppliers for prompt delivery—and, as I know from experience, that does not always take place, particularly when times are good. If all the industries which require steel supplies are clamouring to the steel producers at the same time, there might be a temptation to favour certain companies. It is in this respect that there is likely to be a danger of discrimination.
I do not see how, in a Measure of this sort, it can be made incumbent on the Corporation or anybody else to see that supplies are provided without, at the same time, making provision for the consequences of a failure on the part of the Corporation to carry out its duty and to decide whether or not its duty has been carried out.
I therefore wholeheartedly support the Amendment, which would give the Minister power to make inquiries and

get the full facts of the situation. This would be of material help in fostering good will, removing many of the suspicions that exist and making for better relations in the industry.

Sir Harmar Nicholls: I should have thought that in his own interests the Minister would have looked with some sympathy on this Amendment. It would protect him from the breeding of ill-will. If people who felt they were aggrieved knew that he had had some inquiry and had taken it into account, they would be more likely to find it acceptable.
This certainly works in planning. One thing which has made it possible for people who own land and houses to accept what have been very bitter decisions for them has been the knowledge that there has been a form of inquiry and their point of view has been taken into account. The final word will still be the Minister's, but the knowledge that he had an impartial inquiry to help him to make up his mind, even when the decision goes against those concerned, would make them more satisfied.
I should have thought that from the Minister's own point of view this was an Amendment which he could accept. He has done it in connection with Clause 13. I cannot see why he should not do the same in relation to Clause 3. Because this practice has operated so well in planning affairs, I beg him to take it into account now.

Mr. Marsh: I take the opportunity of intervening now because I should like to say a word on this Amendment which may go some way towards satisfying hon. Members opposite. I hope that we shall revert to the old Parliamentary practice of voting on Amendments on the basis of whether we think them right or wrong, and not on the basis of punishing or not someone on the other side.
The Amendment is unacceptable as it stands. It would apply to any complaint by any iron and steel consumer. This would cut right across the general principle, which has been accepted by Governments of both parties, that in general and subject to certain safeguards such as the existence of consumers' councils, nationalised industries must have freedom to manage their own commercial day-to-day affairs. I am not making a


great point of it, but my objection to the Amendment is that if it were adopted it would apply to any complaint by any iron and steel consumer and would lay the Minister open to an absolute flood of complaints from anyone who chose to make them. The Minister would be obliged to investigate the complaints and would be inevitably drawn into the day-to-day management of the industry.
Leaving aside the actual drafting, it has emerged from the debate so far that the Amendment is prompted by those iron and steel companies which will remain in the private sector. Here this is a very special situation, which does not arise elsewhere in the nationalised industries, and in which the private sector iron and steel companies will not only be in competition with a dominant public sector, but in general will be dependent on the nationalised sector for supplies of raw materials and semi-finished products. I have said a number of times that I think the Minister of Power of whatever party in future will find himself as much concerned with the private sector as with the public sector because he will be the sponsoring Minister of the industry.
Despite that, there are certain advantages in the Minister being able to deal with such complaints on the basis of a formal procedure. In view of the concern expressed and the special situation which exists, I would be prepared in another place to introduce a provision on general lines, although there may be some refinement. I want to produce a situation where, when a complaint is received from an iron and steel producer other than the Corporation or a publicly-owned company that the Corporation or the publicly-owned company is engaging in unfair trading in iron and steel products, the Minister shall have power, after giving the Corporation an opportunity to comment, and if he considers that the complaint raises an issue of substance, to give both the Corporation and the person making the complaint, either personally or through their representatives, an opportunity of appearing before a person appointed by the Minister.
The Minister will then be in a position to give the Corporation directions on any matter arising out of a complaint which has been the subject of a hearing, and the Corporation shall give effect to such

directions. Before the hearing, the Minister will make a copy of the complaint available to the Corporation and a copy of the Corporation's comments available to the person who made the complaint. It is then my intention to make available to the Corporation and to the person who made the complaint a copy of the report of the person conducting the hearing and a statement of the conclusions the Minister has formed on the report and any action he proposes to take.
I have for a long time recognised that the fears for the future private sector, which I still believe are completely unjustified, are very real. I do not think that a provision of this type poses any problem or imposes any added difficulty upon the Corporation. I think that a provision on these lines should meet the genuine misgivings of the private sector companies. I intend to table an Amendment on these lines in another place. In view of this assurance, I hope that the Amendment will not be pressed.

Mr. Patrick Jenkin: By leave of the House. We on these benches express our gratitude for the Minister's very forthcoming reply and for the very reasonable attitude he has adopted to our case, an attitude which contrasts markedly with that adopted by his Parliamentary Secretary on the previous Amendment. I believe that the Minister has gone a long way to meet the case we put to him. We accept that he believes that this must be confined to the private sector steel companies and cannot extend to all consumers. We may have something to say on that question when we deal with the Consumer Council. On the Minister's undertaking that he will introduce an Amendment in another place on the lines he outlined to the House, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Freeson: I beg to move Amendment No. 34, in page 4, line 35, at the end to insert:
() The policy of the Corporation shall be directed to securing the safety, health and welfare of persons employed by them and by the publicly-owned companies.'
The self-evident effect of the Amendment is to enable the Corporation to direct its policy towards securing the


safety, health and welfare of the public sector's employees. It follows very largely part of an Amendment which was moved in Committee by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). I understand that in speaking to that Amendment the Minister said that we would look at the part imposing a duty regarding safety, health and welfare. It is for that reason that the Amendment has been tabled.

Amendment agreed to.

Clause 4.—(DUTY OF THE CORPORATION TO REVIEW THEIR AFFAIRS AND RE- PORT TO THE MINISTER.)

Mr. Marsh: I beg to move Amendment No. 37, in page 5, line 13, at the end to insert:
'(4) The Minister shall lay before each House of Parliament a copy of each report under subsection (1) above.'
This, again, is an Amendment consequential on an undertaking given to the hon. Member for Yeovil (Mr. Peyton). It requires the Minister to lay before Parliament the reports made to him by the Corporation under Clause 4(1) on the organisation of the public sector. The hon. Gentleman also asked in Committee that the reports should be published. Under the normal procedure, it will be for the House of Commons to order these reports to be published. So the Amendment meets everything the hon. Gentleman asked for.

Mr. Peyton: I thank the Minister for his courtesy and helpfulness.

Amendment agreed to.

Clause 5.—(MISCELLANEOUS PROVISIONS RELATING TO THE CORPORATION.)

12 m.

Mr. Peyton: I beg to move Amendment No. 40, in page 5, line 29, to leave out from 'manner' to the end of line 30.
The object of this Amendment is to delete the words:
notwithstanding that the directions may be of a specific character.
It has always been the limiting factor upon directions given to a nationalised industry by a Minister that they should be of a general character. So far as I can see, with a Clause like this it would

be possible for any Member of Parliament to put down Questions asking for any specific direction to be given. I feel that it is wrong for Ministers to have powers for giving specific directions. I hope that the Minister will think about this again and will decide that his powers of generally directing the Corporation are sufficient without taking this Dower for giving specific directions.

Mr. Freeson: The purpose of this Clause as it stands is not to empower the Minister to interfere in the detailed running of the industry. It is directed at the issue of organisation, and it is on those grounds that one must judge it.
Clause 5(2) is an essential corollary to Clause 4 which requires the Corporation to review its organisation and to submit reports to the Minister from time to time. This Clause ensures that the final decisions rest with the Minister, by giving him the power, for the use and non-use of which he is answerable to Parliament, to direct the Corporation on organisation. We believe that any weakening of this power would upset the balance between Clauses 4 and 5 and would weaken Ministerial and Parliamentary control over the organisation of the nationalised industry. It will be noticed that all my remarks are directed to that particular word "organisation" and to no other. For that reason, we feel that the Clause should remain as it is.

Mr. Peyton: It is a little difficult to accept that reply. If the Parliamentary Secretary will read the words of this subsection he will see:
The power conferred by the said section 4"—
I agree that we are dealing with the organisation—
on the Minister to give directions to the Corporation shall extend to the giving to them of such directions as appear to him to be requisite to secure that the carrying on of the activities that have fallen to be carried on under the ultimate control of the Corporation is organized…
and so on.
It seems to me that if one is giving directions on the question of how the Corporation organises its method of performing the functions put upon it by this Bill, the directions go right the way through to the functions of the Corporation. I do not see that under this subsection as drafted the Minister will not


be able to give specific directions to the Corporation covering more or less all of its functions and not just the question of how it organises itself.

Mr. Freeson: The key words in the subsection to which the hon. Gentleman referred are in line 27. I had better read from the beginning of this subsection:
The power conferred by the said section 4 on the Minister to give directions to the Corporation shall extend to the giving to them of such directions as appear to him to be requisite to secure that the carrying on of the activities that have fallen to be carried on under the ultimate control of the Corporation is organised, so far as regards the direction thereof"—
these are the key words:
in the most efficient manner, notwithstanding that the directions may be of a specific character.
I get the impression that the hon. Member is perhaps reading into the Clause more than is intended by the drafting of it. He can rest assured that the Clause does relate to organisation and not to interference in the detailed activities of the Corporation.

Amendment negatived.

Clause 7.—(VESTING IN THE CORPORA- TION OF SECURITIES OF SCHEDULED COMPANIES.)

Mr. Peyton: I beg to move Amendment No. 44, in page 6, line 43, to leave out '475,000' and to insert 550,000'.

Mr. Deputy-Speaker (Mr. Sydney Irving): Together with Amendment No. 44, we can take the three following Amendments: No. 54, in page 7, line 4, to leave out '475,000' and to insert '550,000'.

Amendment No. 46, in page 7, line 7, to leave out '475,000'and in insert 550,000'.

Amendment No. 47, in page 7, line 14, to leave out '475,000' and to insert '550,000'.

Mr. Peyton: The effect of Amendment No. 44 would be to substitute for all references to 475,000 tons the figure of 550,000 tons. I am at this moment unable to say precisely which companies would be let out of the net were the House to accept this very sensible Amendment. I have two points to make. First, I should like to amend the Bill to split up or to preserve—

Mr. F. Blackburn: I thought it was the wish of the hon. Gentleman to get rid of it.

Mr. Peyton: If the hon. Gentleman wishes me to spend longer on this Amendment than I had intended, I shall do so. I was saying that my object is two-fold: first, to preserve a larger private sector—and I imagine it would be a considerably larger private sector if the figure of 550,000 tons were adopted as the criterion—and to urge this upon the Minister as a very sensible course. I am bound to say that the experiences of the last few months in Standing Committee have borne in upon me the fact that the Government are now so far gone in their wickedness or folly as not to be able to take any step in retreat from their position.
My second purpose is to show again, as I did in Committee, that his whole exercise is a trick, if not a cheat. It is a means, a complicated means but a transparent means, of avoiding the procedure which would necessarily have had to be gone through had the Bill been a hybrid Bill. If companies had been directly selected they would all have had their special rights, and the Minister and his Government would have been bogged down from here to eternity upstairs in a Select Committee, with heaven knows who at the Bar earning very large fees. This would have been agreeable to them, it would have been agreeable to the steel industry, and it would have been agreeable to me and to my hon. Friends.
The complaint is that the right hon. Gentleman and his Government had in their minds certain target industries which they wished to take over, certain firms which they were quite determined to take over. They could not name them without going through the Hybrid Bill procedure, so they thought of this highly unlikely and complicated formula, and—surprise, surprise—at the end of the day, out of the slot machine dropped these firms which they wished to take over. It was really a desperate cheat.
If the right hon. Gentleman and his hon. Friends wish to purge themselves and their party of this nasty shame, they should at least move immediately to abolish the hybrid Bill procedure, because it makes no sense if it is as easy to dodge as this. The Minister was


quite blatant about it in Committee—I have not got the reference at this moment, but I was looking at it not long ago—and he admitted that these were the firms he wished to take over. Oddly enough, they were the firms which fitted his formula.
I shall content myself with saying no more at this stage. I move the Amendment more as a protest than in any hope or confidence—

Mr. Edwin Wainwright: I hope you will vote for it.

Mr. Stanley Orme: I hope that the hon. Gentleman will force it to a vote, as he seems so passionate about it.

Mr. Peyton: The hon. Gentleman one of these days will learn a little sense, I expect, although it may be highly optimistic to hope for any such thing from one of those who occupy the lunatic fringe of his party.

Mr. Orme: Answer my question.

Mr. Peyton: You have been told to answer the question, Mr. Deputy Speaker, and to vote. This seems a highly improper way to proceed, but, no doubt, it is one which fits the hon. Gentleman very well.
I move the Amendment far more in protest than, at this stage, any confidence that reason will suddenly dawn and show the Minister that he is doing something for which he has no justification whatever.

Sir G. Nabarro: As my name stands second on all these Amendments, I wish to add a few words to what my hon. Friend the Member for Yeovil (Mr. Peyton) has said. We probed this matter fairly thoroughly in Committee in order to ascertain why the extraordinary figure of 475,000 tons had been selected. There seemed to be no good reason for selecting an irregular figure of that kind. The figure of 550,000 tons is equally irregular, but we have to seek to amend in one way or another by substituting a second figure for the first in order to explore what has been in the Ministerial mind in selecting 475,000 tons and, as my hon. Friend said, in the exclusion or inclusion of firms by the line of demarcation at 475,000 tons.
When the hon. Gentleman the Member for Salford, West (Mr. Orme) intervened just now, he could not have been aware of the protracted discussions we had in Standing Committee about why particular firms, 14 in number, are named in Schedule 1 and 200—thank goodness—much smaller firms are excluded. The net has not been cast anywhere near so widely as it was cast in the 1949 Act. I do not complain about that. The more that is excluded from nationalisation the happier I am. But I want to know what has guided the Ministerial mind in selecting this extraordinary figure. Now, seven or eight weeks after we discussed the question in Committee, is the right hon. Gentleman able to make a further statement on inclusions or exclusions from the list in Schedule 1 as a result of the question raised by these four Amendments to raise the limit from 475,000 tons to 550,000 tons, a modest rise of 75,000 tons in the arbitral line for nationalisation?

12.15 a.m.

Mr. Ridley: As far as I can see, if we draw the line at 475,000 tons we automatically, and without being able to help it, include 14 companies in the Schedule. If we drew it at 550,000 tons, the Schedule would doubtless include fewer companies. One, two or three would drop out.
I do not understand why the Minister, having drawn the line at 475,000 tons, leaves himself room to exclude certain companies if, as a result of negotiations, he decides that he would be wise to do so. I do not want to stop him excluding them. I am very much in favour of that, but the procedure seems very odd.
When the Parliamentary Secretary was questioned about this in Committee, he said:
In the case of Round Oak the arrangements would probably be that Tube Investments Ltd. would agree not to claim compensation in respect of it—that possibly a shell company would be nationalised and that Tube Investments would not claim compensation for the company."—[OFFICIAL REPORT, Standing Committee D, 20th December, 1966; c. 2561.]
It seems most extraordinary procedure, that a works having been included in the 475,000-ton bracket, Tube Investments would offer a complete phantom of a company, say that it will not claim compensation on it, and be allowed to continue to own the actual asset.
It would surely be equally possible for the Steel Company of Wales to offer up a shell company to the Minister say, "We do not want to claim compensation for this", and continue to hold and own the assets the Minister is at present trying to grab hold of? I do not see how one can avoid the Clause and Schedule 1 if one is within the qualifications. The Parliamentary Secretary's answer was very strange, and perhaps the Minister will be able to throw a little more light on it.
I would also like to ask him if he has any news about the two companies he is considering excluding. I do not want to press him if he is not in a position to tell us that negotiations are complete, but I am sure that he would like to tell the House as soon as he can of a decision about them. Therefore, if he has anything to report, I invite him to let us know what it is.
My main question concerns the mechanics of exclusion, which seems to make a nonsense of the Clause and the limit of 475,000 tons if it can be got round so easily. If the Minister can get round it, some other company might be able to get round it too.

Mr. Kenneth Lewis: Not having been on the Committee, I did not have the advantage of listening to the discussion. The figure of 475,000 tons is fixed as being the production for the year beginning 1st July, 1963. That happens to be my birthday, and it is a dastardly trick to do on anybody's birthday.

Mr. Marsh: That was not actually the reason for fixing that date.

Mr. Lewis: I do not complain; I still enjoyed my birthday. I did not know about that at the time.
The fact remains that the figure was fixed for a time when the production of steel was rather high under the Tories. It has gone down somewhat since, and I think that it is a great deal less today. If that figure was set for the present production, I wonder if certain companies would escape. I do not know whether it has fallen to that extent, but there has been a considerable reduction since the party opposite came to power and I think that the date was fixed at the high peak of Tory production deliberately

because the Minister hoped to catch more companies.

Mr. Marsh: It has been a short, fascinating and quite surprising debate in some of the propositions put forward. The Amendment is simple. It seeks only to change the figure, which is accepted as being fairly arbitrary, as any figure had to be in this context. There is no special figure that one could dream up as being the right one if a section of the steel industry was to be nationalised. There is no specific figure that is of itself right. It was decided to fix the figure at 475,000 tons. Several hon. Members have asked which companies would be excluded if the Opposition Amendment were accepted. Surely it would not have been a bad idea for them to have found that out before putting the Amendment down. If the Amendment were accepted, they would succeed in excluding from public ownership the English Steel Corporation, Park Gate Iron and Steel and Round Oak Steel Works.
There is not much point at this hour in arguing the principle of whether we should or should not nationalise the steel industry, the House having decided to do so. One should rather examine the figures involved in these three companies which the Opposition would exclude. English Steel has a production of 506,000 tons, Park Gate 483,000 tons and Round Oak 489,000 tons. But even more significant is the capacity of these companies. English Steel has a capacity of nearly 900,000 tons per annum. Park Gate a capacity of some 775,000 tons and by 1970 it will have a capacity of some 850,000 tons.
Leaving aside the dispute, which we have had for so long, as to whether one should or should not embark on this exercise in the first instance, it would be absurd to try and rationalise the industry while leaving blocks of capacity of this size outside public ownership, given that public ownership is to take place. The Opposition Amendment is rather illogical within the context of nationalising the steel industry with the intention of trying to rationalise it and its production. Without units of this size, we could not rationalise the industry.
Reference has been made, not surprisingly, to Round Oak, where there are special factors. As I mentioned in


Standing Committee, I am examining the position of two companies, Round Oak and Brymbo, which is dealt with rather separately because it is not a scheduled company as are the others. I have no statement to make at the moment. [HON. MEMBERS: "Shame."] I do not think that it is a shame. This is an important matter and there are complicated issues at stake. I have visited the company myself, as has the Chairman of the Organising Committee. A genuine attempt has been made to find out how much strength there is in the argument for the exclusion of Round Oak and Brymbo under either head.

Mr. O'Malley: Will my right hon. Friend bear in mind that, not for doctrinaire reasons but for other complex reasons, if he were to announce the exclusion of Round Oak particularly from nationalisation, that announcement would, I believe, be regarded with a great deal of hostility on this side of the House?

Mr. Marsh: That might well be so. It is precisely because there are arguments—complicated arguments—on both sides that I have taken some time to look at this and to look carefully. I am bound to say that I believe there is at least a case to argue in the case of Round Oak, and I accept from my hon. Friend that there are complex arguments either way which have to be decided. On the other hand, if one were convinced that a particular company would be of no real advantage to the Corporation but that its removal would be of some disadvantage to a large engineering interest, then that is something that, in all commonsense, one should look at. All I say now is that, as far as Round Oak is concerned, it is rather different from the other two. I am still examining its case, along with that of Brymbo. I have no announcement to make tonight.
The Opposition Amendment would produce a totally unrealistic situation within the context of the decision to nationalise the industry with the object of bringing about rationalisation. We would be left with such very big blocks of capacity outside the public sector that we would not be able to do the job properly that we set out to do.

Sir G. Nabarro: Could I ask the Minister one question? It is a matter of eight or nine weeks since this question of the exclusion of these two companies, Round Oak and Brymbo, was debated upstairs, and, of course, my hon. and right hon. Friends and myself accepted that negotiations were going on. We rather expected that by the time the final stages of this Bill were reached the Minister would be in a position to make a statement.
If he is not in that position this evening, can he indicate to the House how much longer he feels his negotiations will last, having regard to the important questions of the value of equities in the companies set down for nationalisation?

Mr. Marsh: It would be a mistake to refer to these at the moment as negotiations. Representations were made by Tube Investments and Guest, Keen & Nettlefold about these two companies, and as a result there was the question of discussions with the two companies. There has since been physical examination of the plant and the capacity to see the arguments, and it is now really a question of weighing up the arguments for and against the three possibilities—there are I think only three possibilities for dealing with these particular companies.
I cannot say when we will reach a conclusion on this, although I would hope to do so in the very near future. There are big issues involved, and I do not think the companies themselves want the thing rushed. There are sizeable issues of principle here. I would hope to be able to make an announcement in the not too distant future.

Mr. Peyton: As I said at the beginning, I moved this Amendment really in protest against the Government dodging with this Hybrid Bill procedure rather than in any hope. One has to be content with very small things, and we at least have enjoyed slightly the spectacle of the hon. Member for Rotherham (Mr. O'Malley) bullying, threatening and menacing his Minister, and with that I shall have to be satisfied. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Barber: I beg to move Amendment No. 49, in page 7, line 23, to leave out from 'which' to end of the line 27 and to insert:
'a period of twelve months from the passing of this Act shall be completed or, if the Minister shall by order so appoint, the day on which an instrument of accession to the Treaty signed at Paris on the Eighteenth day of April 1951, establishing the European Coal and Steel Community, on behalf of Her Majesty's Government is received by the Government acting as depository of that Treaty, if such instrument of accession shall be deposited before the expiry of the said period of twelve months.'
I understand that this Amendment is being taken together with Amendment No. 50, in page 7, line 23, leave out from 'expires' to 'and' in line 24, and No. 51, in page 7, line 26, leave out 'thirty-six' and insert '52'.
Amendment No. 49 is self-explanatory and I can take it very briefly. It provides for vesting day to be 12 months from Royal Assent, or an earlier date if (1) we recognise the Treaty of Paris, and (2) the Minister of Power so decides.
This has not been an easy Amendment to draft, but the intention can be simply stated. It will be obvious to the right hon. Gentleman from the fact that we have considered at length in the past the relationship of the nationalisation of steel to joining the European Community that there would be no point in our pursuing this Amendment to a Division, and we do not intend to do so. But on the assumption that the Prime Minister's negotiations with the Community will be completed within a period of 12 months after this Bill receives Royal Assent, then in our opinion this Bill should not become fully operative until these European negotiations are complete.
There can be no doubt at all, although I have no high hopes, that the acceptance of this Amendment by the Government would be taken by our European friends as an earnest of the Prime Minister's good intentions and thereby help him in his negotiations. It would make it crystal clear that we meant so to organise the steel industry as to bring it into conformity with the practice of the E.C.S.C.
We had a long debate on this matter last week, and I do not intend to go over the same ground again at this hour of the morning, but two consequences did emerge from that debate.
12.30 a.m.
First of all, nationalisation as such is not a bar to our entry into Europe, but

secondly, the proposed organisation of the National Steel Corporation would be contrary to the present practice of the European Coal and Steel Community. Of this there can be no doubt. Therefore, in these circumstances an Amendment to defer full operation of the Steel Corporation till the European negotiations are complete would be both a sensible decision and an earnest to the Six that, in the words of the Prime Minister, we mean business.

Mr. O'Malley: I would have thought a third point emerged from the debate to which the right hon. Gentleman has referred. It was the keenness with which the right hon. Gentleman wanted to accept the European pricing system. We told him from our side that it did not work, and that no one wanted it. I hope he has seen the statement by Mr. Peech in his annual statement to United Steel, where he said precisely the same thing. I would have thought the right hon. Gentleman would have been briefed on that.

Mr. Barber: I did not want to go into too much detail on the argument, but I also read that speech this morning, and I read, in particular, the passage set out in large type in the advertisement in The Times, which made it abundantly clear that the industry had no faith at all in the decision of this Government to nationalise the steel industry. It would not be in order for me to go into the whole question at present, and we did go into it the other day, but if the hon. Gentleman wants to make a speech about it he can no doubt catch the eye of the Chair.
The organisation of the steel industry as announced by the Government is inconsistent with the present practice of the E.C.S.C. Of that there can be no doubt whatsoever. I had said so, and I had in fact completed my speech when the hon. Gentleman rose, but I put this point to the right hon. Gentleman because I think it is useful, after having had a number of debates on the merits of the organisation of the steel industry in relation to our possible entry into Europe, to find out from the Minister what his view is on the question of timing. As I said earlier, I have no intention of pressing the Amendment to a Division whatever the Minister says.

Mr. Peyton: To refer very briefly to the other two Amendments which are being discussed with this one my right hon. Friend has moved, those are, of course, far more modest; they do not involve necessarily quite such a delay; and they were designed to enable the Government, and particularly the Minister, to get their breath after the almost indecent haste with which they rolled this Bill through a terribly obliging Standing Committee. The right hon. Gentleman the Leader of the House declared himself very, very satisfied at one stage with the progress which was being made, and doubtless the Minister will recall the enthusiasm with which his own supporters greeted a suggestion of mine that we should ring up the Leader of the House at three o'clock in the morning to find out if this was really his view that—

Mr. Speaker: The hon. Member will be in order if he speaks to his Amendment.

Mr. Peyton: As I said, these Amendments are proposed, really, to give the Minister a chance to get over the indecent haste with which this Bill was pushed through a terribly obliging Standing Committee, and it was in order to give substance to my allegation that the Minister must be somewhat out of breath after his whirlwind process that I referred—

Mr. Speaker: To repeat a passage which was out of order does not bring it into order. The hon. Member must come to his Amendment.

Mr. Peyton: I am obliged, Mr. Speaker. I will immediately bow to your Ruling. These Amendments, which are very much like the Amendment of my right hon. Friend and have a similar purpose, would merely help the Government to get their breath and not to do anything with the same indecent haste as has marked progress so far.

Mr. Ridley: The timing of the Bill and vesting date has been remarkable. We waited for two years after right hon. and hon. Members opposite came to power—I must be accurate: we wait for a year and a quarter. The Bill is then rushed through at precipitate speed in one of the shortest Committee stages for a major Measure. No Committee stage

of another major Measure could have taken such a short calendar time.

Mr. Speaker: Order. Even irony does not bring the hon. Member within order. He must come to the Amendments.

Mr. Ridley: I believe that the reason for this has nothing to do with vesting but is concerned with Europe. It was at about the time of the Committee stage that the Government decided to bid for entry into the Coal and Steel Community. They laid their plans at that time. It looks suspiciously as if it was decided to rush this wretched Bill through because the Government knew that it conflicted with Europe and that if the Bill was going through Committee during the period of negotiation, it would have been extremely difficult and unfortunate for the Minister.
No other explanation has been given for the haste with which the Bill is being rushed through—

Mr. Speaker: Order. The hon. Member has not yet said a word about the Amendment. He must say a word or two about it.

Mr. Ridley: I am grateful to you, Mr. Speaker, but the Amendment suggests that vesting date should be delayed for a year or until the accession of this country to the Coal and Steel Community, whichever is the sooner. I support that proposition because I do not believe that we should do these things to our steel industry until we have carried out this far more important negotiation with the Coal and Steel Community and decided what is necessary to adapt the Bill to the Community.

Sir D. Glover: May I help my hon. Friend? He need not worry about this, because the Prime Minister today made a speech in which he said that nothing would stand in the way of our entry into Europe. I presume, therefore, that in another place all these Amendments will be accepted.

Mr. Ridley: I had not seen that. I am grateful to my hon. Friend for drawing it to my attention. That means, I suppose, that the Minister will accept the Amendment, which implements that pledge which the Prime Minister has given at Strasbourg.
It is extremely important not to start doing things—we accept the principle of nationalisation—to the grouping of the companies, to the compensation and to all these matters which could be wildly wrong. We must wait for vesting day until after this negotiation is settled one way or the other. Otherwise, the time of the House and of the Committee upstairs will simply have been wasted, because the Government will have to come back and change it all when they have got into Europe, as I greatly hope they will.
Therefore, for the sake of this much more exciting adventure, in which hon. Members on all sides of the House can take part, I suggest that the Minister accepts the Amendment.

Mr. Eldon Griffiths: As a complete novice on this complicated Bill, the debates on which I have read with great interest, in particular the one last week on the subject of the E.C.S.C., I should like to ask the Minister two questions arising directly from the Amendment.
First, does the right hon. Gentleman want the negotiations for British entry into the Common Market to succeed? If he does, is he prepared to make the minor sacrifice in the time scale of the Bill that is requested in the Amendment? I am sure, as my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) has suggested, that if the Minister were willing to make this very small sacrifice, he would assist the Prime Minister in the difficult negotiations that he now has under way.
The Minister will be aware that the most difficult task before the Prime Minister is to convince the Europeans of the sincerity of this Government in seeking to belong to Europe, and I assure the right hon. Gentleman that it would go some way at least towards convincing the European nations of our sincerity if at this last hour he were to say, "Yes, we put joining Europe very high on our list of priorities, in fact so high that we are even prepared to make a concession on this dearest doctrine of all, the nationalisation of steel". I assure the Minister that this would make a very deep impact in Europe, and the Prime Minister would be eternally grateful to him.
My second question, arising from that, is simply this: does he not agree that it will be necessary to reorganise the Iron and Steel Corporation to meet our obligations to the European Community in the event of the Prime Minister being successful? It is, I think, fairly plain from the facts, as can be examined in the E.C.S.C., that we should have to change the organisation of the steel industry as provided for in this Bill in the event of our joining Europe.
I take it that it is common ground on both sides of the House that we hope to join the Common Market within the next year or so. Surely it is elementary that the Minister should hold his horses for a while, that he should have another look at this Amendment, and thereby avoid the painful process of having to reorganise what he has just organised on nationalised lines in perhaps no more than 18 months' or two years' time?
With the Prime Minister going round Europe with the Foreign Secretary in the hope of achieving great things, I cannot see why the Minister of Power should get in his way, and, as I am sure the Minister is anxious to get into Europe, and to see the Prime Minister pull it off in the face of all the difficulties on his own benches and in Europe, I can only ask the right hon. Gentleman to make this small gesture, that he tear a little piece of doctrine from his heart and lay it at the feet of the Prime Minister on behalf of this great European venture which we all have before us.

Sir D. Glover: I appeal to the right hon. Gentleman. I have not, and nobody else has, read in full the Prime Minister's speech at Strasbourg this afternoon, but from what I have read on the tape and in the Press it was a pretty powerful speech advocating Britain's admission to the European Economic Community.
I happen to be one of those who are pledged to support our entry into the Community.

Mr. Lubbock: The hon. Gentleman was not in 1959.

Sir D. Glover: It would be wrong to reply to that interjection from the Liberal Whip from a sedentary position. In any case it is not worthy of a reply, because I am emotionally involved in this. I believe that the future of this


country is involved in whether or not we get into Europe. I think that we are dealing with the future of the whole of this nation, of children yet unborn, and with the whole basis of our development over the next 30 years.

Mr. Speaker: Order. The hon. Member must not discuss the merits of whether we should join the Common Market.

Sir D. Glover: With respect, Mr. Speaker, what I am saying is very relevant. During our debates it has become quite clear that a lot of the things in the Bill will be difficult—I put it no higher than that—for the Europeans to accept. This Bill will make it more difficult for us to get into Europe. Our debates could appear to show that we are not convinced that we ought to get into Europe. The negotiations for our entry will go on during the next 12 or 18 months or two years. Surely, under those conditions, we should not begin an action which will have to be undone if, by accepting the Amendment and delaying the vesting date, we could leave the whole thing in a fluid position? Therefore, in the interests of the nation —not just in the interests of the present Government, because this is far bigger than party politics—I ask the right hon. Gentleman to show, by accepting the Amendment, that he also is a convinced European—which I doubt—and therefore wishes to show Europe that we are taking no steps which will make our entry into the Community more difficult.
I can assure the right hon. Gentleman that if we pass the Bill in its present form many people—the people who matter—in Europe will say that we are showing that we do not expect to get in. This is psychologically important and therefore, particularly as the Prime Minister, without any equivocation, has said that if we fail to get into Europe it will not be our fault, let us tonight make it quite clear that we have taken no action that can be construed by anybody as bad faith.

12.45 a.m.

Mr. Marsh: I expected many things when bringing forward the Bill, but I never thought that it would become such a pivotal point of the European argument—given that there is an argument; we are all Europeans now.
The hon. Member for Ormskirk (Sir D. Glover) said that many people who matter in Europe believe that the Bill is a barrier to Britain's entry into the Community. I can only repeat that it is precisely because the Government have decided to examine the possibilities of European entry now and to study the implications that I have deliberately and positively had specific discussions on the subject. I repeat what I said the other night; there is no evidence whatever, nor have I ever heard it suggested outside the House, that British membership of the Community could be determined by anything in the Bill.

Mr. Barber: I made the point that there was nothing in the Bill which would prevent our joining, but I said—with a great deal of evidence behind me, from my inquiries—that if the Bill were implemented and the industry was nationalised in the way in which the Minister and his predecessors have outlined, it would be contrary to all the practice of the European Coal and Steel Community. It is a simple question: does he agree? I am informed from fairly high sources in the E.C.S.C. that this is the case.

Mr. Marsh: I have never attempted to hide the fact that if and when this country was about to join the Community, prior to joining there would have to be serious negotiations not only about steel but about coal and many other factors. I am satisfied that there is no inconsistency between nationalisation and the Treaty of Paris—this would not be challenged—and that given the necessary political will the Bill is reconcilable with the Treaty.
But if this country is to negotiate with other people we must surely start on the assumption that we also have some rights to negotiate. If we are to enter into negotiations with the whole of Her Majesty's Opposition saying that the Government have no case and the British people have no case, it will be very difficult. I accept that if we decide to enter many things will have to be negotiated, but at the moment the Government stand on the belief that there is nothing incompatible between the Bill and membership of the E.C.S.C. Some people argue about the question of size, but the French coal industry, as a proportion of the coal industry of the Community, is larger than


the British steel industry will be as a proportion of the new Community. All of these things have to be argued, but we are starting with the assumption, as we must, that as far as we are concerned, this is British legislation in a British Parliament, to meet British circumstances and as with many other things, we might subsequently have to negotiate and argue industry with other people about it.

Sir D. Glover: Of course this is something that might have to be altered, with the Coal Board. This has been in existence for 20 years. I am not talking about the European Coal and Steel Community which is a technical organisation. I am talking about the effect that this will have upon the politicians—I need not mention one in particular. If we do not delay vesting date we are giving them a tremendous argument, that we are still proceeding as if we did not expect to succeed.

Mr. Marsh: Without pursuing this matter any further because I think that we should get into difficulties, it is conceivable that Britain might not join the European Economic Community All that I am saying is that whatever the reasons were for a failure, if such a failure took place, nothing in the Iron and Steel Bill would be a part of those reasons. There are much bigger reasons than this. It is wholly fallacious, and certainly very unhelpful to the views which hon. Gentlemen have put forward, to argue as they do over and over again, the argument which others might want to use against the case which they have put up.
The position was summed up very well in the Financial Times on 12th January, talking about the difficulties now facing the industry. It said:
This makes it all the more important that plans for rationalisation are pushed through as fast as possible. Just because the problems and the sums involved are considerable there is a tendency to think in longish time-spans. The question often asked is what should the industry look like in the mid-70s. But should it not be thinking in terms of 1970?
The hon. Gentleman talked about the indecent haste with which we have rolled this Bill through, and coming from a Member of the Opposition who sat on Standing Committee D this requires a degree of brass-facedness which would be difficult to beat. I have always believed

that this Bill should be rolled through as quickly as possible because I have always believed that unless we rationalize this industry it would collapse. I have always believed, before I was a Minister, and before we were in Government, that the only way we would get this level of rationalisation was by nationalising the industry and forcing it to take these decisions.
Given that the matter is urgent we have to get this Bill as quickly as possible and we have to get vesting date as quickly as possible. It is essential that this uncertainty be ended. The Organising Committee, set up after Second Reading, has made an excellent start and has got to grips with the central issues of organisation. There should be no difficulty in completing the practical difficulties of vesting within nine months from Royal Assent. I would hope to shorten that period substantially and anything which lengthened the period before vesting date would be undesirable for the industry.

Mr. Barber: The right hon. Gentleman says that he has always believed that we should get this Bill as quickly as possible. He is only one of a number of members of the Cabinet and it is well known that the Prime Minister took a different view, because again and again he deferred the introduction of the Bill, believing that it was not a matter of any great consequence, apart from its advantage, in political terms, within the Labour Party. This is why it has been brought forward now. I am sorry that the right hon. Gentleman has not been more forthcoming. I knew from the outset that, as a result of our debate last week, which took place after the Amendment was put down, there was no hope of us getting the Amendment, and this is why I saw no reason in pressing it.
I regret that the right hon. Gentleman has not been more forthcoming about the relationship between the Bill and the practical consequences of it in connection with our joining the E.E.C. Those of us who served on the Standing Committee know full well, from the attitude which the right hon. Gentleman adopted in our debates on Europe, that he is not particularly keen to get into Europe. That was evident from his reaction on a number of occasions.

Mr. Mendelson: The right hon. Gentleman is misrepresenting what happened in Standing Committee. The question which my right hon. Friend and many of my hon. Friends posed in Committee was whether it was reasonable to ask that a clear decision of the electorate—to give a mandate to the Government to take this industry into public ownership—should be disregarded and pushed aside because of possible future developments.

Mr. Barber: I said that the Prime Minister had decided on a number of occasions to push it aside. He could have gone ahead with the Bill at an earlier stage; but he deliberately decided not to do so. However, having listened to the Minister and realising that we cannot take the matter further now, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 9.—(VALUATION OF SECURITIES QUOTED BEFORE MAY 1966 AND OF NEW ISSUES.)

Dr. Bray: I beg to move, Amendment No. 59, in page 10, line 10, after 'section', to insert:
(a) except in a case falling within the following paragraph.
I suggest that it would be convenient for the House to consider, at the same time, the following Amendments: No. 60, in line 12, after 'nil', insert:
(b) in a case in which they consist in shares issued in consideration of the extinguishment of an equivalent number of shares in another company (being one specified in Schedule 1 to this Act) which is effected by virtue of a compromise or arrangement sanctioned under section 206 (power to compromise with creditors and members) of the Companies Act 1948 by the court, being a compromise or arrangement whose effect is that that company becomes a subsidiary of the company by whom the shares are issued, shall be deemed—

(i) in a case in which the shares extinguished do not constitute the whole of a class, to be (except in a case in which, after the compromise or arrangement takes effect, a fresh issue of shares of that class is made) the same as that of shares of that class, and (in the said excepted case) what the value of shares of that class would have been had the fresh issue not been made (no regard being had, in either event, to any conversion, after the compromise or arrangement, into shares of a different nominal value of shares of that class);
(ii) in a case in which the shares extinguished constitute the whole of a class, to

be what the value of shares of that class would have been had they continued to exist and vested in the Corporation by virtue of section 7 of this Act.

Amendment No. 61, in line 13, leave out 'that' and insert 'the new'.

Amendment No. 62, in line 18, after '(7)', insert '(a)'.

Mr. Speaker: If there is no objection, so be it.

Dr. Bray: The purpose of this series of Amendments is to accommodate the merger, which has been agreed, between Dorman Long, South Durham and Stewarts and Lloyds. If hon. Members have questions about the mechanics of this exercise, I will endeavour to answer them.
The effect of these proposals is to ensure that if the merger goes through, the compensation position of the present Stewarts and Lloyds and South Durham shareholders will not be prejudiced. The broad effect is to fix the compensation on the two new classes of Dorman Long shares which will be issued to the former shareholders in South Durham and Stewarts and Lloyds at the price which the former shareholders would have received had they retained their former shares.
The shares held by Dorman Long, in South Durham and Stewarts and Lloyds will, on nationalisation, vest directly in the Corporation. However, it will be open to the Corporation, as sole shareholder in the three companies, to reconstitute the merged grouping immediately after vesting day, if this is considered at the time to be desirable. It will also be open to the Corporation to extend the grouping—for example, by including Consett—and it would, of course, although this is probably unlikely, be possible to break up this grouping and group one or more of the three companies in some other way. Thus, the adoption of this group of amendments will accommodate the proposal and will, at the same time, leave the position flexible in a way that is desirable in the present position.
As for the merits of the merger, it has been generally welcomed and is regarded as being in line with the thinking of the nationalised industry as it will exist under the Corporation and as should exist with


any rational reorganisation of the industry.

1.0 a.m.

Mr. Kenneth Lewis: There was a certain amount of concern in the North of England regarding the Consett Ironworks and a feeling that the best kind of amalgamation would be for South Durham, Consett and Stewarts and Lloyds to be merged. There is a fear that part of the rationalisation which will take place may mean that Consett will finish. Will the Minister make a statement on that?

Dr. Bray: With the permission of the House, I speak again in order to answer that point. My right hon. Friend has met my hon. Friend the hon. Member for Consett (Mr. David Watkins) and other hon. Members from constituencies in the North-East who put these concerns to the Minister. They were based not at all on the merger, but perhaps on a misinterpretation of the Benson Committee's Report. There is no intention, no proposal whatever, that Consett should be closed. There is no exclusion of Consett from the grouping in the North-East. Although it would be premature to anticipate any finding of the Organising Committee, it is quite obvious that any sensible grouping of the steel industry would include Consett along with the Tees-side firms.
Not only have they had an existing exchange arrangement on orders with Dorman Long, but it is likely that all facilities, and even production planning, would be complementary for the companies involved. There is, therefore, no reason at all for people in Consett, or anywhere else in the North-East, to fear that the merger will be contrary to their interests—indeed, quite the opposite.

Mr. Barber: First I should like to congratulate the hon. Gentleman on his remarkable foresight. I took down his words. He said that this merger will "be in line with the thinking of the nationalised industry as it will exist. "For a great many months we have been asking the right hon. Gentleman and the Parliamentary Secretary what is likely to happen. Now we have had at last a glimpse of the thinking of the new nationalised industry as it will exist.
We welcome these Amendments, which are made necessary, as the hon. Gentle-

man will agree, by the initiative of the three steel companies in private enterprise. It is very much to the credit of the boards of directors of Dorman Long, Stewarts and Lloyd and South Durham that, despite their abhorrence of nationalisation, and despite the passage of this Bill, they are going ahead with this merger. They believe quite genuinely that the Government's policy of nationalising the industry will be a set-back to it, but despite this they have gone ahead with a proposal which lesser men might well have shelved until after vesting day.
Knowing the strong feelings on the question of nationalisation in the industry, the hon. Gentleman will agree that it is a great tribute to these men that they have put the industry and the nation first when certainly there would be temptation to say, "The Bill will go through, so why bother about this now?" These three companies, worth over £300 million, made 5·4 million ingot tons of steel a year and accounted for a fifth of the production. They are among the top 10 European steelmakers. It is a tragedy that they cannot be left in their own formation to get on with the job of making steel instead of being subjected to the doctrinaire prejudice of the Left-wing of the Labour Party.

Amendment agreed to.

Further Amendments made: No. 60, in page 10, line 12, after 'nil', insert:
(b) in a case in which they consist in shares issued in consideration of the extinguishment of an equivalent number of shares in another company (being one specified in Schedule 1 to this Act) which is effected by virtue of a compromise or arrangement sanctioned under section 206 (power to compromise with creditors and members) of the Companies Act 1948 by the court, being a compromise or arrangement whose effect is that that company becomes a subsidiary of the company by whom the shares are issued, shall be deemed—

(i) in a case in which the shares extinguished do not constitute the whole of a class, to be (except in a case in which, after the compromise or arrangement takes effect, a fresh issue of shares of that class is made) the same as that of shares of that class, and (in the said excepted case) what the value of shares of that class would have been had the fresh issue not been made (no regard being had, in either event, to any conversion, after the compromise or arrangement, into shares of a different nominal value of shares of that class);
(ii) in a case in which the shares extinguished constitute the whole of a class, to be what


the value of shares of that class would have been had they continued to exist and vested in the Corporation by virtue of section 7 of this Act.

No. 61, in page 10, line 13, leave out 'that' and insert 'the new'.

No. 62, line 18, after `(7)', insert '(a)'.—[Dr. Bray.]

Clause 10.—(VALUATION OF SECURITIES ISSUED, BUT NOT QUOTED, BEFORE MAY 1966.)

Mr. Peyton: I beg to move Amendment No. 64, in page 12, line 2, to leave out from 'issued' to the end of line 4.
This presents me with the opportunity on the Floor of the House of celebrating one of those rare occasions when I got near to the Chief Secretary in mind: we very nearly met. It is amazing that in a Bill which is perpetrating an act of great folly there should appear at the top of page 12 the words:
and the arbitration tribunal, in determining the value that the securities would have had as aforesaid, shall have regard to all relevant factors.
The House will surely share my amazement that any arbitration tribunal should be enjoined to
have regard to all relevant factors.
The Chief Secretary said in Committee:
The hon. Member for Yeovil first asked me why one should have the words in. From the tone of his voice he thought it was painfully obvious that one would have regard to all relevant factors whether one had the words in or not. I hope that I do not embarrass him by saying I rather agree with him."—[OFFICIAL REPORT, Standing Committee D, 29th November, 1962; c. 1248.]
I am sad to have to state that during much of our proceedings in Committee the Chief Secretary and I were very far from being in that sort of cordiality and agreement. Emboldened by that and anxious to enshrine those feelings in an Act of Parliament, I decided to table the Amendment to give the right hon. Gentleman the chance that he must be longing for to accept it and delete wholly unnecessary words.
The second question I asked the Chief Secretary was what the relevant factors were. The right hon. Gentleman said that, because the list was so lengthy, he

did not want to set it out in case something was omitted. The phraseology and terminology that creep into some of these odious Bills always interest me in a mild way. It is occasionally worth while for Members of Parliament to ask Ministers to defend almost indefensible phraseology, whether on grounds of meaning or because it is wholly unnecessary. I have given the right hon. Gentleman a second chance to accept a reasonable and modest Amendment.

Mr. Diamond: What the hon. Member for Yeovil (Mr. Peyton) says is true. We covered this ground fully in Committee. I found it difficult to imagine what new points the hon. Gentleman would put to me. He has not put any. He has asked the same questions. I repeat the same argument. To save the time of the House, I refer hon. Members to the proceedings in Committee where I pointed out that, if the words are unobjectionable and if it is perfectly obvious, as I think it is, that every tribunal would have regard to all the relevant issues, there is no harm in putting the words in so as to make it absolutely clear that that is the framework within which the arbitration would take place. Further, as I said in Committee, this follows the precedent of the previous steel nationalisation Act and, if these words, having there appeared, were now to be omitted, lawyers and others might try to put a special interpretation on the fact that they were now omitted. So I thought then, and I think now, that by far the best thing is to leave the words in.
The hon. Gentleman made it clear that this is not a large point. It is a small one. On balance, I think the words should be retained. I do not think the hon. Gentleman needs me to go over again the reasons why, in the interests of the stockholders' representatives, it would be wrong to attempt to list all the factors that might arise in every single consideration which any tribunal might have. It would be far better to leave it absolutely wide and open so that the tribunal could, if it felt so satised, have regard to every single issue put before it, if it was satisfied that they were all relevant issues. In those circumstances, I need delay the House no longer.

Amendment negatived.

Clause 13.—(PROVISION OF PRODUCTION FACILITIES TO BE SUBJECT TO MINISTER'S CONSENT IN CERTAIN CASES.)

Mr. Speaker: We come to Amendment No. 66. Mr. John Peyton.

Mr. Peyton: I am not moving that Amendment, Mr. Speaker.

Mr. Speaker: We come to Amendment No. 69. Mr. Edward M. Taylor.

Mr. Edward M. Taylor: I understand that we are considering this Amendment with Amendment No. 68?

Mr. Speaker: Yes, with Amendment No. 69 we are taking Amendment No. 68. The hon. Member may move whichever he likes.

Mr. Peyton: No. 69 is in my name. I am not sure whether you wanted my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) or myself to move it. I would be glad to give way to my hon. Friend.

Mr. Edward M. Taylor: I am the signatory to Amendment No. 68 and I hoped to amplify and support the points made by my hon. Friend the Member for Yeovil (Mr. Peyton).

Mr. Speaker: After this exchange of compliments, may I just say that I looked for the hon. Member for Yeovil (Mr. Peyton). He did not rise. Mr. John Peyton.

Mr. Peyton: I am so sorry, Mr. Speaker. I thought you called Amendment No. 68. That is why I did not rise to my feet.
I beg to move Amendment No. 69, in page 14, line 33, after 'substantially', to insert 'and adversely'.
This Amendment can be moved shortly. Its purpose is to insert the adverb "adversely" after the word "substantially.". It seems to me that there is no reason for the Minister's action unless the effect upon the industry is adverse. The mere fact that it may be affected substantially does not affect the matter.

Mr. Edward M. Taylor: I should like to say a few words in principle about Amendment No. 68, in page 14, line 33, after 'affect', insert 'or seriously to prejudice' which you said could be considered at the same time, Mr. Speaker.

I hope my hon. Friend the Member for Yeovil will not think that I in any way consider his Amendment to be inadequate. Indeed, I put my name to his Amendment. However, I thought that there was one point of detail which should be clarified and I took the liberty of putting down a separate Amendment.
My hon. Friend did not mention the question of semantics. It would be foolish of the Minister to issue a notice to stop something happening which would, in fact, act to the advantage of the steel industry as a whole.
The other point that I am endeavouring to cover in Amendment No. 68 is to try to ensure that the circumstances in which the Minister would intervene would be circumstances as would be likely
seriously to prejudice the efficient and economic development of production facilities in Great Britain".
Interference in the private sector in this way is in principle a bad thing. While I appreciate that the Government will want to reserve some power to do so, I think that the circumstances in which they act should be limited, and I have tried to limit them by proposing the insertion of the words "or seriously to prejudice". The Government should be able to present a good case when such a notice is issued.
If we simply have the words
substantially and adversely to affect
all the arguments can be on the Government side. The Government will not have to produce a large weight of evidence. When such a notice is issued, the Government should have a substantial weight of evidence on their side and that is why I suggest the insertion of these words.
In Committee the Government made it clear that they considered that their obligation to the private sector would be fulfilled if they allowed the private sector to grow at round about the same rate of percentage increase as the public sector. This would allow very little scope indeed for the private sector to grow. If there were just a 10 per cent. growth in the public sector over two or three years, clearly the private sector, operating on a narrower field and with a smaller scope, would not be in a position to grow even according to the simple


rates of economic growth which the circumstances in their case might make inevitable.
1.15 a.m.
As far as I can see, two points arise. One is that there could be an increase in production facilities in the private sector, not through the spending of money on more machines and factories, but through increased efficiency. This is something which inevitably could increase substantially the facilities available in the private sector. In such circumstances, if the Government are committed to allow only the same rate of increase for the private sector as in the public sector, would a notice be issued? If my Amendment were to be accepted it would be difficult for the Government to justify this.
The second point which must be accepted by the Government is that in the smaller scale operation of the private sector one or two private firms might be put in the position that they must grow or go out of existence. This kind of problem does not arise in the case of a public corporation with substantial resources—at least, it would not arise nearly so often—but in the case of a small firm, the decision either to grow or to go out of existence can be the only choice. My fear is that unless we put in words which I have suggested, then in such circumstances the Government could issue a notice to stop that development.
The whole point of issuing these notices is an admission of failure in the future on the part of the public sector. It is quite clear that the Government are scared stiff that this small private sector, without the great resources of the State behind it, and without the abilities of the State to get capital on the cheap, will be able to knock spots off the public sector. This is a strange position for the Government to be in, bearing in mind the argument they have put forward about how efficient will be the operation of this large-scale corporation.
In these circumstances, if the Government had faith in their own ideology, if they had faith in the principles of nationalisation, they would see no need for any notice to be given.
What should be done is to limit the scope within which these notices can be

given. I suggest the reference to "prejudice", to amplify and define the point made by my hon. Friend, because the Government should be under an obligation to prove that damage will be caused to the public sector. That is the sole reason why I have put down this Amendment. If the Government have faith in their own policies and in the efficiency of nationalisation, they will accept it.

Mr. Freeson: May I deal, firstly, with Amendment No. 69 moved by the hon. Member for Yeovil (Mr. Peyton). To accept this Amendment would turn the whole process of consideration of schemes by the Minister as it were, upside down. It would require the adverse projects to be defined in advance. It would go without saying that the Minister, in examining the substantial effect which certain projects would have on the situation, would withhold his consent were there to be any adverse effect indicated by them. But it seems to us that there can be no real merit in accepting the Amendment for the reasons which I have briefly stated.
Amendment No. 68 is very closely connected, the words "seriously to prejudice" which the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) wishes to insert are, I believe, taken from Section 6(3) of the 1953 Act which provide that the existing Board should not refuse consent to a development project
unless it appears to them … that the proposal will seriously prejudice the efficient and economic development of production facilities in Great Britain.
But I understand that, in practice, the Board has found the exercise of its control under this condition to be unduly limiting. It has been obliged to give consent to a certain number of projects which, had its powers been stronger, it would not have approved. I understand that, in the 13 years of its existence, the Board has been obliged to give consent to practically all the projects submitted to it, and this has at least partially been due to the restrictive words, "seriously to prejudice", governing its position.
For the reasons which I have briefly given, although we understand the


motives behind them, we find the Amendments unacceptable and I ask the House to reject them.

Mr. Barber: I can deal with the matter most conveniently by taking Amendment No. 69. The implication of the hon. Gentleman's rejection of the words "and adversely" is to say that the consent of the Minister is required in cases where the provision of additional production facilities would substantially and beneficially affect the efficient and economic development of production facilities in Great Britain. This must be the consequence of what he said. It cannot be in the general interest that that should be so.

Mr. Freeson: I think that the right hon. Gentleman has misunderstood the position. It is in order that the Minister may be in a position to judge the relative merits, not to imply beforehand what the merits may be. This is precisely the point I was seeking to make with regard to the rather restrictive words at present governing the Iron and Steel Board's functions.

Amendment negatived.

Mr. Patrick Jenkin: I beg to move Amendment No. 136, in page 14, line 44, at the end to insert:
Provided that before the person seeking the consent appears before the person appointed by the Minister, the Minister shall furnish both persons with a written statement setting out the potential difficulties in the applicant's case, together with the Minister's observations there-on.
The Parliamentary Secretary was not present in Committee when we moved a series of Amendments to Clause 13 to try to invoke, following some of the principles established some years in various forms—by pamphlets, by administrative Government action, and so on—the rule of law where the Government have retained discretionary powers over the private citizen. These Amendments were not accepted, with one minor exception, that exception being covered by Government Amendment No. 70, to which we shall come in a few minutes.
At one point, however, the Minister said that he accepted the idea behind our Amendment but felt unable to accept the words we had suggested, and he even said that he thought that it would be desirable not to have anything actually put in the statute. This is the point of the

Amendment now before us. The procedure for controlling the investment projects of the private sector is that the Minister issues a notice, whereupon those who want to invest in new plant and capacity in the terms covered by the notice must give advance warning of their plans to the Minister. The Minister will then consider them and, if he is satisfied that they ought not to go ahead, he can withhold his consent.
Here is a case in which the rights of the private citizen are liable to be overridden by Government discretion. In the circumstances, the very least that the Government can offer is an opportunity for the private citizen to put his case and to meet the arguments which might influence the Minister's mind in determining whether or not to give consent.
The Clause already provides that the Minister must appoint a person to hear the case for the applicant, and that that person must subsequently report to the Minister. I do not want to anticipate the next Amendment, Amendment No. 70, but the position is that the Minister must then make that report available to the applicant. The applicant really wants to know the case he must meet before he puts his own case to the person appointed by the Minister. In other words, the Minister, if he is minded to withhold consent, or at any rate feels that he would like to know more of the facts and circumstances surrounding the application, should at that stage make known to the applicant the factors which are likely to influence his mind, and which may indeed already be influencing his mind.
The applicant has a right to know the case he must meet. The Minister said on this point in Committee:
On the other hand, I think it is fair and sensible that the applicant should know what the potential difficulties are in advance of the hearing and so I would give a categorical assurance that applicants would have a written statement of these difficulties, which is a rather different thing from sending them a statutory document."—[OFFICIAL REPORT, Standing Committee D, 30th November, 1966; c. 1543.]
The form in which our Amendment was then drawn was perhaps rather too formal, and perhaps the Minister was justified in suggesting that setting out the nature of the objections in a formal


document might go some way to prejudice the applicant's case and would not necessarily, therefore, be to his advantage.
We have therefore tabled a new Amendment to provide for a written statement in precisely the terms of the Minister's categorical assurance that that statement would be forthcoming. We did so because we believe that it is more desirable that an obligation of this form should be written into the Statute, and not rest on the Minister's statement in Committee. I entirely accept that nobody believes that a Ministerial statement, particularly when preceded by the words "categorical assurance", is any the less binding merely because it was given in Standing Committee. But some small firms may not have the resources to refer to somewhat abstruse documents, and should be able to point straight away to something in the Act, rather than in the Standing Committee HANSARD, giving them the right to a statement of the case they will have to meet when they appear before the person appointed by the Minister.
The Amendment is reasonable, and the Minister has clearly indicated that he has sympathy with the idea lying behind it. I hope that the Parliamentary Secretary will be able to agree that it is not unreasonable that this requirement should be placed in the Act, and not merely rest on a Ministerial assurance given in Committee.

Mr. Freeson: I do not think that there is any basic difference between the Government and the Opposition on this point, and the assurance given in Committee is very largely dealt with in the next Amendment, Amendment No. 70, which I shall move.
It therefore rests with me to repeat that the Minister is anxious to ensure in this respect, and all other respects, that the procedure laid down in Clause 13 is entirely fair. It is for that reason that, in response to the debate in Standing Committee, Amendment No. 70 has been tabled. It provides that a copy of the report of the person who holds the hearing shall be made available to the person seeking consent, but that is distinct in detail from the point sought in this Amendment.
1.30 a.m.
We are seeking to give a reassurance on this point. The reason we are proceeding by means of an assurance rather by accepting this Amendment—which is largely in line with what was proposed in Committee—is that we still feel that the Amendment might prejudice the position of the applicant. For example, as drafted, it would require the Minister to furnish a written statement
… setting out the potential difficulties in the applicant's case, together with the Minister's observations thereon.
This would mean that the Minister would be under statutory obligation to make observations of a type on which he should reserve his position until after the hearing, and that, in our view, is an important point.
Inevitably, an element of prejudice would be imported if the Minister were to present a statement as required by the Amendment, and we believe that similar difficulties would arise to those which, I understand, we pointed out during debate on a similar Amendment in Standing Committee.

Mr. Patrick Jenkin: Is not the hon. Gentleman trying to have it both ways? Is he not, on the one hand, saying that this is not a judicial tribunal with a power to decide but is merely a person appointed by the Minister to hear the case? Is it not unreasonable, therefore, to go on to say, on the other hand, that it would prejudice the applicant's position if the Minister set out how his mind was moving—and this is what we are trying to get at—before that hearing, as it were, took place? Is not the word "hearing" a misnomer in that it is something that is not a judicial function but an administrative procedure?

Mr. Freeson: That is a fair point. I hope that I am not going too far or drawing too close a parallel when I point out that this kind of situation occurs with a number of Government or semi-Governmental activities where a Minister has to act, in a sense, in a semi-judicial capacity. One can think of similar examples with regard to the work of the Ministry of Housing and Local Government, where it would be most improper to introduce a procedure whereby the Minister had to express such observations at so early a stage and where he


has accordingly to reserve his position. I am not trying to draw too close a parallel, but it is in such circumstances that we must consider the Amendment and the next one.

Mr. Lubbock: In Standing Committee, the Minister said:
… the applicant should know what potential difficulties there are in advance of the hearing.…"—[OFFICIAL REPORT, Standing Committee D, 30th November, 1966; c. 1543.]
The next Amendment, which the hon. Gentleman says will largely meet the case, only provides that the Minister shall furnish the applicant with a written statement after he has considered the report of the person appointed to hear the application.

Mr. Freeson: I do not want now to go too far into the details of the next Amendment but it will be seen that it refers, and the Minister's undertaking was in relation, to the furnishing of the report of the person appointed to hear the application.

Mr. Lubbock: No.

Mr. Freeson: Perhaps we can deal with this point when we reach the next Amendment. I have tried to go over the ground as best I can, not having been a member of the Standing Committee. The views expressed by my right hon. Friend then are still, in general, the views held by the Government. We are seeking to meet the point as best we can by the next Amendment. It is still our view that it would prejudice the position of the applicant were the Minister to intervene, as it were, at a stage when the hearing was not completed.
The fact that a hearing has been arranged will carry some implication that the Minister sees some difficulties with an application and it is only fair to the applicant that he should know those difficulties in advance of the hearing. But that does not necessarily mean that we should accept the procedure suggested in the Amendment. We can—and I repeat this on behalf of the Minister—give a categorical assurance that it will be the invariable practice to let applicants have a written statement of the difficulties which have prompted the hearing, and of any other points which are considered desirable to be explored at the hearing.
An administrative procedure on this basis should safeguard the interests of applicants without prejudicing their position in any way. We are seeking in a sense, if I can put it in this way, to have it both ways, with a view to trying to help applicants rather than to be difficult in a bureaucratic sense.

Mr. Patrick Jenkin: I do not want to waste a lot of time, but with the leave of the House I would ask the Parliamentary Secretary and his advisers to look at this point again, particularly in the light of some of the arguments he has adduced this morning and in relation to points made by the Minister in the Standing Committee.
The precise analogy was made by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) that we should have a procedure similar to the planning appeal procedure. The Minister of Power has specifically rejected that as a viable analogy and said that the position was quite different. I will not read his remarks, but they appear in Column 1548. The Parliamentary Secretary has now sought to justify his refusal to give the applicant advance notice of the case he will have to meet by saying that the Minister is in the same position here as in a planning appeal. Really the two arguments do not stand together.
This matter is crucial to the survival of the private sector of the industry. If they cannot expand capacity they are probably driven out, and therefore to have a watertight procedure on this is absolutely essential if the Minister's desire to maintain a profitable and viable private sector is to be attained.
I do not think their request to have a statutory right to know the case they have to meet is unreasonable. How this is to be worded to attain these things is something to which I believe the Parliamentary Secretary could give some attention between now and when the Bill comes before another place, and if he could give us an undertaking to do that I think we could move ahead very rapidly.

Mr. Freeson: I do not think there is any difference of objective here. I certainly accept the spirit of the Amendment, or the objective which the hon. Gentleman is getting at. We must always do our best to seek to protect the person


involved in administrative procedures of this kind. While I think the hon. Gentleman has repeated the explanation I gave a little earlier on too narrow a front when he referred to my comparison with the Minister of Housing—because I said it was not a close parallel but somewhat similar—I can say that we will have a look at this again, although without commitment.

Mr. Jenkin: On that assurance, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Freeson: I beg to move, Amendment No. 70, in page 14, line 44 at the end to insert:
'() Where a person seeking the consent under subsection (2) of this section of the Minister avails himself of the right conferred by the last foregoing subsection to appear before a person appointed by the Minister, the Minister shall furnish him with a copy of the report of the person so appointed and a statement of the Minister's reasons for giving or refusing his consent'.
This Amendment follows the same point as the previous Amendment. The Bill as now drafted gives an applicant for the Minister's approval of a private sector development project under Clause 13 the right to put his case personally before a person appointed by the Minister, as set out in Clause 13(5).
This Amendment gives the applicant the right to see that person's report, as I previously indicated, and to have a statement of the Minister's reasons for giving or refusing his consent.
In Committee the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) moved an Amendment, as we have already discussed, providing for the applicant to see the report of the person who hears his case. At that time my right hon. Friend accepted the Amendment in principle, and added that he would want to go further: not only might the applicant be furnished with a copy of the report; he should also be given the Minister's reasons for accepting or rejecting the report. It is on that basis that this Amendment is before the House.

Mr. Patrick Jenkin: We recognise that this Amendment is moved in pursuance of the undertaking given by the Minister in Committee. It is perhaps the least important of the series of Amendments

which we moved in Committee. Nevertheless, it represents a small advance on what was in the Bill when first printed. For that we are grateful. Once a private company has had its application turned down and realises that there is no future for it, at any rate it will know that, and I suppose that that is something to be thankful for.

Amendment agreed to.

Clause 14.—(GENERAL FINANCIAL DUTIES OF THE CORPORATION.)

Mr. Peyton: I beg to move, Amendment No. 71, in page 15, line 24, at the end to insert:
'and an amount to be agreed annually with the Minister which shall be a special contribution towards replacement costs'.
As I think it would be a convenience to the House, and as a contribution to rapid progress, perhaps my next Amendment, No. 72, in Clause 16, page 16, line 40, at end insert,
(d) such an amount as may be agreed by the Minister as representing the difference between the value of the securities vested in the Corporation by section 7 of this Act and the total value of the net assets taken over by the Corporation.
could be taken with this, because the arguments are the same in both cases.

Mr. Deputy Speaker (Sir Eric Fletcher): If the House is agreeable. I think it would be convenient.

Mr. Peyton: The first Amendment is to make an arrangement that the Corporation shall be obliged to increase its earnings to an extent which would enable it to make a special contribution towards the replacement costs, and Amendment No. 72 is to add to the Corporation's commencing capital debt an amount equal to the difference between the value of the shares or the price which is being paid for the shares and the total net value of the assets at vesting date. Both these Amendments have the common purpose of ensuring that the Corporation does really discharge not only in theory but in fact the full measure of the duty laid upon nationalised industries by the White Paper on financial obligation, and with that Paper the Chief Secretary, I know, is very familiar. I think both these Amendments deserve the serious consideration of the Government.
I will not go into all the arguments about whether or not the compensation is adequate. At the moment, that is not the point I seek to make. What I am concerned with, though, is that here the Corporation is acquiring cheap the assets of the scheduled companies, and that, in order that its financial indebtedness should represent the true facts, the financial indebtedness should be increased by the difference, as I have said, between the value of the compensation stock and the net assets. It may be that the Government will not be inclined to accept both Amendments. I should be very happy if they would accept one or the other.

Mr. Edward M. Taylor: I should like just to say a few words in support of my hon. Friend's case. I think that if the figures are investigated they show what a clear difference these Amendments would make. Let us take first of all the question of assets. My hon. Friend has referred to two points, first of all, replacement, and secondly, assets.
Let us take first the simple question of assets. I asked a Question in July last year of the Minister of Power about the value of the assets of the companies which would come within the framework of this Bill. I was given the answer on 19th July that the book value of the assets after depreciation, as shown in the latest reports of the companies, came to over £1,300 million, which is more than double the compensation. That was book value, and we may assume that replacement value would be substantially higher. Thus, the Government will be considering the financial obligations for the new Steel Corporation in terms of compensation which are certainly only half of even the book values of these companies and a much smaller proportion of the replacement value.
1.45 a.m.
My second question concerns replacement value, which we will never know. One thing which would give us an interesting light on what it might be is that in the last ten years, the scheduled companies have spent over £1,100 million on capital investment. This would give us an idea of what the replacement value would be. To that extent, the Government are approaching their financial obligations solely in compensation terms

which are wildly out of touch with either the asset value or the replacement value.
I appreciate that, looking to the future, it may not be possible for the Government to hope even that the new Corporation will be able to face its financial obligations in the simple question of the compensation price. The steel industry is going through difficulties and these undoubtedly will continue. The Government should, however, abandon any pretence that they are measuring up to financial responsibilities in relation to the real assets of the Corporation, because certainly these are substantially more than they are—at least double—the compensation.

Mr. Diamond: Amendment No. 71 proposes that there should be an additional provision of the
amount to be agreed annually with the Minister which shall be a special contribution towards replacement costs".
As the hon. Member for Yeovil (Mr. Peyton) was good enough to say, I am indeed familiar with the 1961 White Paper, which sets out targets, and it will in due course be for the Minister and the Government to fix targets in respect of the use of the capital involved here.
It is proposed that there shall be an additional special contribution based on a theory which, I regret, I cannot fully accept. I have considerable sympathy, however, with what the hon. Member said about financial targets. There are two aspects of this. One is providing for the correct amount of depreciation in order to ascertain the profits and the other is to make such provision out of the profits as may be necessary to have liquid resources available to replace assets if they are to be replaced.
As to the provision of depreciation, therefore, confusion would be caused if one were to depart from the normal principle of providing depreciation on an historical cost basis. That is the recommendation of the Institute of Chartered Accountants, to which I naturally pay regard. It is my own view of the matter. I imagine that it would be the view of this matter of most practising accountants. Therefore, the Government would not recommend that we could accept the Amendment, which would not so provide.
I hope that I have made it clear, however, to the hon. Member for Yeovil that although the method of providing depreciation prior to arriving at the profit should wisely be the existing method of providing depreciation based on the historic cost, nevertheless in achieving its financial target the Corporation would naturally have to have regard, as the 1961 White Paper of the hon. Member's Government sets out—and I accept these principles—to the profit made after providing not only for depreciation on the basis of historic cost, but also for free finance, which is earmarked by the process of making reserves out of profits, which is necessary to replace plant where it is to be replaced.
I do not want to delay the House, but it is not a valid assumption that plant is always replaced, or that it is always replaced at additional cost. It is often not replaced at all, and where it is replaced it is very frequently replaced at the same cost because improvements in design, in efficiency, and in manufacture have enabled the same productive capacity to be produced at lower cost. The effect of inflation is balanced by a reduction in cost arising from new design, and so on, and frequently an additional cost of replacement is not a replacement, but is due to the improvement element in the new machine or whatever it may be. One must not assume always that this is a problem which faces one on every occasion.
I think that I have explained the position sufficiently to satisfy the hon. Member for Yeovil (Mr. Peyton). Although we could not accept the Amendment, for the reasons which I have given, we would, nevertheless, wish to have regard to the necessity for providing the appropriate amount of finance in meeting the target set out, which would be calculated following the White Paper of 1961.
I turn now to the second Amendment. I find it difficult to express any sincere sympathy with the point of view put forward. I entirely disagree with the point of view put forward either for the purpose of arguing against the Clause, or for the purpose of showing that the amount of compensation is inadequate. In response to the allegations which have been made, perhaps I might point out

that the Amendment would have the effect of reducing the compensation by about £150 million.

Mr. Michael Foot: That is a very good reason for accepting it.

Mr. Diamond: If we were to accept the hon. Gentleman's view that the profits should be calculated not after providing for the depreciation which the steel companies have provided, but after providing also for the cost of replacements, a much greater figure, it has been calculated that the profits of these steel companies would not have been at the rate of 11 per cent., as they have been on average, but at the rate of 7 per cent., and as compensation is calculated on the basis of the percentage of profit, we would get a figure of seven-elevenths of the proposed compensation, which would mean reducing the compensation by about £150 million.

Mr. Patrick Jenkin: The right hon. Gentleman cannot be allowed to get away with that specious argument. The plain fact of the matter is that the difference between the assets value of the nine quoted companies which the Government are taking over, and the compensation which the Government are paying for them, is no less than £376 million, which represents the shortfall in compensation which ought to be paid by the Government, and which the Government are not paying. This is why it was quite rightly described as barefaced robbery.

Mr. Diamond: The hon. Gentleman need not have got so excited and risen to intervene. He has merely repeated what his hon. Friend said. He has added nothing new to the debate, and he has made it necessary for me to repeat what I said because he has not understood the point. What the hon. Gentleman's hon. Friend is proposing—and it is on the Notice Paper with six names supporting it, all Members of the Opposition—is that the correct way of calculating the profit is after providing for depreciation on the basis of replacement costs. If we provide for that, as the Financial Times showed recently in an erudite article, the profits of the steel companies over recent years would have fallen from 11 per cent. to 7 per cent. The compensation figure, which is based on market prices —and market prices follow profits—


would, if that method of calculating depreciation had been adopted, have been approximately £150 million less. If what the hon. Member was seeking to do was to produce an Amendment related to the Clause as an excuse for trying to demonstrate that the compensation is under-assessed, he chose a boomerang but assuming that that was not the case, and that it was an Amendment drafted, as appears to be the case, to calculate the interest and the debt which the Corporation takes over, the Amendment adds nothing at all, and gives rise to no need for an alteration in the figures.
The hon. Member wants to insert the difference between the value of the securities vested in the Corporation and the total value of the net assets, but the value of the securities vested in the Corporation is the total value of the net assets. That is what "value" means—it means what people are prepared to pay and not what people have paid in years gone by. "Value" does not mean book costs less certain kinds of depreciation, but what one can get in the market place, and the market place in this connection is the Stock Exchange. That is where market price has been fixed.

Mr. Peyton: As I explained to the right hon. Gentleman—and he should have accepted my assurance about this—I was not seeking to raise the question of adequate compensation. I was seeking to make sure that the Corporation and the publicly-owned companies earned sufficient in the future so as not to be in any way dependent upon the Exchequer.
Even though tempted by the Chief Secretary I will not deploy the long argument that we had in Committee, and which he has now raised, namely, that this is, if not a rigged market at any rate a manipulated one. It is in no way a free one. The industry has been under a threat for years, and also under price control. The right hon. Gentleman knows that everything he has said is thoroughly unfounded. He can thank his lucky stars that I am not going to go on all night about it.

Mr. Diamond: I say immediately that what the hon. Member for Yeovil (Mr. Peyton) says is quite right. He did not seek to rest this matter on the question of compensation. But the hon. Member

for Glasgow, Cathcart (Mr. Edward M. Taylor) went into the point at some length. His whole speech was devoted to the inadequacy of the figure for compensation, and I thought it only fair to reply shortly to that point.
Turning to the point made by the hon. Member for Yeovil, I agree with his fundamental principle that the profit earned should be such that no burden is left on the Exchequer. But he will realise that there would be no such burden if the profit made was sufficient to remunerate the capital employed, and the capital employed is what the Exchequer is putting into it. Therefore, we have no need to increase it arbitrarily, which is presumably what is behind the Amendment. Whether the proposal is as the hon. Member for Cathcart took it, or as the hon. Member for Yeovil intended his Amendment No. 72 to be, namely, a proposal to increase the benefit coming back to the Exchequer, it is not necessary. As a Treasury Minister one is always delighted to have benefits of this kind, but it would not be a fair burden on the Corporation and in those circumstances I am afraid that I could not recommend the House to accept either Amendment.

Amendment negatived.

2.0 a.m.

Mr. Barber: On a point of order. It may be for the assistance of the House if I were to say that it is not the intention of my hon. Friends to move Amendments No. 73, in page 17, line 3, at end insert:
The rate of interest and the date from which it shall be payable and other arrangements made under this subsection shall be reported by the Minister to Parliament and must be agreed by an affirmative resolution of the Commons House of Parliament.
Amendment No. 139, in page 17, line 34, at end insert:
Provided that moneys borrowed under this section may not be applied for the purpose of acquiring interests in, or property or rights of, any company operating wholly or mainly outside Great Britain involving the expenditure of a sum in excess of £50,000 unless an order authorising such acquisition has been approved by the Commons House of Parliament.

Amendment No. 75, in page 17, line 40, leave out paragraph (f).

Amendment No. 151, in page 23, line 40, leave out 'a Government department', or the Amendment in the name of


my hon. Friend the Member for Wokingham (Mr. van Straubenzee) to Government Amendment No. 82. This will mean that there are simply Government Amendments No. 82 and No. 93 remaining.

(1A) The Minister may make regulations—


5
(a) requiring that there shall be stated in, or in a note on or statement annexed to, the statement referred to in subsection (l)(a) above, such information relating to bodies which, at a time specified in the regulations, are subsidiaries of the Corporation and to assets of the Corporation consisting of shares or stock in or amounts owing (whether on account of a loan or otherwise) from, such bodies as may be so specified;


10
(b) requiring that there shall be so stated such information as may be so specified relating to companies (not being at such time as aforesaid subsidiaries of the Corporation) shares or stock in which are, at that time, to such extent as may be so specified, held by the Corporation, and to assets of the Corporation consisting of shares or stock in, or amounts owing (whether on account of a loan or otherwise) from those companies;


15
(c) requiring that there shall be so stated, in such form as may be so specified, the information furnished by the Corporation's subsidiaries in compliance with any provision of the enactments for the time being in force relating to companies imposing on a company a requirement to furnish information corresponding to any that may be required to be furnished by the Corporation by virtue of paragraph (b) above;


20
(d) determining the circumstances in which, for the purposes of any requirement imposed by virtue of paragraph (a) or (b) above, shares or stock in a company are to be treated as being held by the Corporation;



(e) granting exemption in circumstances so specified from a requirement imposed by virtue of paragraph (a) or paragraph (b) above;


25
(f) making such provision supplementary to any requirement imposed by virtue of paragraph (a) or (b) above as the Minister thinks necessary or expedient.

I hope that it will be for the convenience of the House to consider at the same time Government Amendments No. 83, 84, 88 and 91. The purpose of this and the related Amendments is to have regard to the Companies Bill now before Parliament, which imposes certain new obligations upon companies as regards publication of the extent of their interests in other companies. These are broadly the need to publish a list of their subsidiaries, with the size of the holding in each class of shares of the subsidiary, and a list of other companies in which they hold more than 10 per cent. by nominal value of the shares of any class, and also the size of their holding in the shares of that class.

An Amendment was moved in Committee by the hon. Member for Scarborough and Whitby (Mr. Michael Shaw), which was not completely satisfactory, but we are indebted to him and we have tried to accept the spirit of it and, as far as possible, to improve upon it. That Amendment spelt out the requirements now in the Companies Bill and putting.

Clause 22.—(ACCOUNTS OF THE CORPORATION AND AUDIT THEREOF, AND STATISTICS.)

Mr. Diamond: I beg to move Amendment No. 82, in page 20, line 27, at the end to insert:

it very shortly, if I sense the desire of the House to have them dealt with shortly, the Government Amendment empowers the Minister to make Regulations so that not merely will we be able to do what the hon. Gentleman wanted us to do, that is to follow the obligations imposed by the Companies Bill in its present form—of course it may alter—but also to follow it in the form in which it finally leaves Parliament, and to follow any further obligations put upon companies by any subsequent company legislation, without having to alter the Act.

The hon. Gentleman may say that this is not a compulsion upon the Minister but merely a power to make Regulations, and I want to give a firm assurance on behalf of the Minister that he intends to use his powers to provide that the Corporation shall be subject to the same obligations as companies under the company legislation. I have explained the principle, and I could go on to explain the detail if the House requires. The


same arguments apply to all the Amendments and I hope that they will be acceptable to the House.

Mr. Michael Shaw: I am grateful to the right hon. Gentleman and, since he did not give a detailed explanation, I will not delay the House by making any detailed comments. My worry is that certain information is required from companies which are not themselves subsidiaries where the Corporation holds shares but does not hold a controlling interest in them. We do not know the definition of "the holding of shares". It might be possible that information would be required not from companies in which the Corporation holds a minority of shares but from companies in which the Corporation holds a minority of shares but in which they are held as to a minority by the Corporation. In other words—without making this too complicated—this process could go in indefinitely. Until this matter is defined by the Minister at a later date, we cannot be sure on this subject of shares being held by the Corporation.

Amendment agreed to.

Further Amendments made: No. 83, in line 4, after 'above', insert:
'and of any note or statement required by virtue of subsection (2) above to be placed thereon or annexed thereto'.

No. 84, in line 5, leave out 'that statement' and insert:
'the statement so referred to'.

' (2) Section 39 of the 1949 Act shall be amended as follows:—


5
(a) in subsection (1) after the word "section" there shall be inserted the words "being machinery for operation at national level or works level, or a level falling between those levels and appearing to the Corporation to be appropriate", after the words "establishment and maintenance" there shall be inserted the words" for operation at any such level as aforesaid", and for paragraph (b) there shall be substituted the following paragraph—


10
'(b) the promotion and encouragement of measures affecting efficiency, in any respect, in the carrying on by the Corporation and by publicly-owned companies of their activities, and the promotion and encouragement of measures affecting the safety, health and welfare of persons employed by the Corporation and by publicly-owned companies;'



(b) in subsection (2), for the words "the Minister of Labour and National Service", there shall be substituted the words "the Minister of Labour"; and


15
(c) after subsection (2) there shall be inserted the following subsection—


20
'(2A) Where it falls to the Corporation or a publicly-owned company to participate in the operation of machinery established under this section, and the operation involves discussion of a subject by other persons participating therein, the Corporation or, as the case may be, the publicly-owned company shall make available to those persons, at a reasonable time before the discussion is to take place, such information in their possession relating to the subject as, after consultation with those persons, appears to the Corporation or, as the case may be, publicly-owned company to be necessary to enable those persons to participate effectively in the discussion'.

No. 85, in line 8, after '1948', insert:
'as amended by any subsequent enactment, whether passed before or after the passing of this Act, and a copy of the report of the directors of each such company,'.

No. 86, in line 11, at end insert:
'or of the report of the directors of the subsidiary'.

No. 87, in line 24, at end insert:
'In this subsection any reference to the report of the directors of a company is a reference to the report of the directors of the company which, by section 157 of the Companies Act 1948, is required to be attached to every balance-sheet of the company laid before it in general meeting'.

No. 88, in line 25, at end insert 'note'.

No. 90, in line 27, leave out subsection (5).—[Mr. Marsh.]

No. 91, in line 31, at end insert:
(6) The Corporation shall keep at their principal office copies, which shall be available for inspection during business hours, of any statement of information furnished by the Corporation in compliance with a requirement imposed by virtue of subsection (1A) above, and shall furnish a copy of the statement to any person on demand and on payment of such reasonable charge as the Corporation may require.—[Mr. Marsh.]

Clause 27.—(CONDITIONS OF EMPLOY MENT, PENSION RIGHTS, &C.)

Mr. Marsh: I beg to move, Amendment No. 93, page 24, in line 31, to leave out subsection (2) and to insert:

This is an important Amendment, because it represents the culmination of a long discussion in Committee and many representations, which were made on a large and growing scale, by people outside the House. The issue which has been under consideration for a considerable time is the extent to which workers in an industry should be entitled to participate in the administration of that industry and the extent to which consultation could be extended beyond what have become the traditional forms of consultation.

Everybody is now in favour of consultation and workers' participation in industry. However, it is fair to say that the variation in the level of consultation is very wide indeed. There are firms in which employers make a real attempt to take workers into their confidence and ensure that they are given an opportunity not just to express their views on matters of health, safety and welfare, but to take part in the actual decisions which affect their destinies, just as they affect the destinies of everybody concerned in those companies.

A great deal of thought was given by the Government to this matter to see how far we could go in ensuring that consultation in the new steel industry becomes a real working thing, enabling workers to talk about far more than the usual dirty towels, the quality of the food in the cafeteria—subjects which have frequently been the level of consultation in many firms.

The Amendment sets out to ensure, first, that machinery is in operation at every level—the national level, the workers' level and the level falling between the two; in lay terms, any levels within the industry where this is feasible —to enable consultation to take place.

We have defined this as:
the promotion and encouragement of measures affecting efficiency, in any respect, in the carrying on by the Corporation and by publicly-owned companies of their activities, and the promotion and encouragement of measures affecting the safety, health and welfare of persons employed by the Corporation and by publicly-owned companies;".
There are no limits on the level of worker participation. This is a very new and original provision. For the first time no limit is placed on such discussion.

In any organisation, particularly one as important as this, management must be the people who carry the responsibility for final decisions. We cannot run organisations by large committees. We certainly could not run the Steel Corporation like that. We are producing a situation where there are no limits on the level at which workers may make representation. One of the objections made over the years by many people has been that, even if workers are given the opportunity in theory of participating in such discussions and playing a part in these major issues, it is not possible to do so because they do not have available the information to take an active part in such negotiations.

So the Amendment carries a significant provision when it says:
Where it falls to the Corporation or a publicly-owned company to participate in the operation of machinery established under this section, and the operation involves discussion of a subject by other persons participating therein, the Corporation or, as the case may be, the publicly-owned company shall make available to those persons, at a reasonable time before the discussion is to take place, such information in their possession relating to the subject as, after consultation with those persons, appears to the Corporation or, as the case may be, publicly-owned company to be necessary to enable those persons to participate effectively in the discussion.
There might be an immediate reaction that this leaves the Corporation as the body which has the right to withhold certain information even after it has had consultation with the bodies concerned, but this is absolutely essential. I think hon. Members on both sides will accept that there are some things which have to be regarded as commercial secrets. To give a classic example, it might well be that a particular development showed that the Corporation was contemplating purchasing plant, property or land—I take this as an extreme example—then clearly the effect of making it public would mean that the price would immediately rise.

It might be that in some fields the Corporation, which will be in strong competition with very powerful bodies internally and externally, might be in danger if certain commercial information were publicly known. None the less, we have a Statute which says that the Corporation shall make available such information in its possession relating to


the subject as it is virtually possible for it to make available.

I wish to make clear that the intention of the Amendment is that the management side in the consultative and conciliation machinery should make available all relevant information except where there are special circumstances of confidentiality. We are introducing an Amendment which lays down in a Statute the right of workers' representatives to participate in the whole future of their industry, quite rightly and properly. There are no limits to this. They are entitled to discuss profitability and development and as of right by Statute to have available for those discussions such information as can be made available without endangering the commercial interests of the Corporation itself.

2.15 a.m.

Rear-Admiral Morgan Giles: What kind of numbers does the Minister visualise as having access? Would it be the whole range of employees? How would such persons be selected?

Mr. Marsh: The hon. and gallant Gentleman raises an interesting point. There are a large number of unions involved. Some have different views about some things. The setting up of the consultative machinery will be a major job. It is not a job for Members of Parliament. It is for the unions themselves, in consultation with their employers, to work out what is for them the best method of achieving machinery to put this into effect. The Bill merely says that there shall be such machinery.
Mr. Ron Smith, who, if there can be such a thing, is the industrial relations member designate of the Corporation, is already in discussions with the unions on this matter. It will be primarily his responsibility to ensure that such machinery can be introduced. It is not possible for me to say at the moment exactly what form it will take, how many unions will be involved, and in what way they will be involved. All I am concerned with is that there shall be within the industry, first the acceptance of the fundamental principle, that people whose entire future is bound up with their company have a right to express their views and to discuss the interests of the company, and, secondly, that it is im-

possible for people to play an active and sensible part in such discussions unless they have the necessary information.
The Corporation will clearly have to carry the responsibility for the managerial decisions. That is what managers get paid for. The Corporation will also have to carry the responsibility of deciding if some items of information are of a type the disclosure of which would be injurious to the commercial interests of the Corporation. The Corporation will have to have consultations with the bodies concerned about the provision of such information. It may rightly be said that this is a fairly revolutionary development. I think it is. It is unique. It exists in no other nationalisation Statute. Nor does it exist in any other Statute affecting any other industry. We now have the opportunity of putting together this new industry which is being scrambled and seeing how far in a literate, sophisticated society we can carry trade unions and trade union members with us as participants in the job.
The industry will be faced with very difficult problems indeed. We all know the problems of manning and overmanning and of industrial relations. I do not believe that the major reforms which are necessary in this industry can be carried through unless we carry the men with us. I do not believe that we can carry the men with us unless they are parties to some of these decisions. It means that they will have to be parties to the unpopular decisions. They will have to place themselves in a position—this is a real challenge to the unions—where there will be no excuse for dodging the issue, where the facts and figures will be laid out, and where they will see the figures and the economic and business implications of the policy which is being pursued. If it is in the long-term interests of their members, they will have to carry the responsibility for some of the unpopular decisions as well as the popular ones.
None the less, if we do not try this experiment at some time, we shall never know how far we can carry trade unions and trade union members with us. It is a declaration of faith in a trade union movement which is one of the oldest in the world. It is the biggest in the world among free trade unions. We want to see


how far the unions can go along with this. There will be arguments. I would be surprised if there were not. There will be arguments about how the Act is implemented. There will be arguments from time to time to the effect that certain pieces of information should be available which are being withheld. This would not surprise me. I am not at all sure that one would not have a much easier life without this Amendment than with it. But I am not at all sure that it is a good thing always to have an easy life and that this is not something we ought to try.
There has been a lot of thought devoted to this Amendment by many people in my own party and in the trade union movement generally. We have talked in the Labour movement for many years about what we have described as workers' control and this has been defined as meaning almost anything under the sun. In the course of this Bill and the pressures which I admit have been placed upon me to meet arguments on these matters, we have all had to think a lot more specifically and firmly than we have had to do, for instance, when people have been writing pamphlets and taking part in debates in Bloomsbury front rooms on Sunday afternoons. Nevertheless, having been forced into the position of facing the realities of this matter, certain things have emerged. There can be no escape from the simple proposition that managers have to manage. This is what they are paid for and that is what they carry responsibility for. Secondly, organisations and great industries cannot be run by representatives of outside bodies. People who serve on a board or on a Corporation must serve on that body with a loyalty purely to that body.
Having said that, one looks to the extent to which people are able to participate in this great debate which affects their future and their industry. The Government have attempted by this Amendment to produce a real experiment where by statute joint consultation is anything that affects the future of the industry, where by statute any information which is necessary, if it can be given without damaging the industry, should be given to enable workers' representatives to participate in this. It may be a failure —I do not think it will be—but it will

certainly be a very interesting couple of years to see how this emerges. It could be the start—if I may say so with all due modesty—of a real assessment of the rôle of the British trade union movement in industry.

Mr. Ridley: The Minister has paid a tribute to the Standing Committee dealing with the Bill by saying that he had been forced to think up arguments against points put from this side. If he has been forced to think about this matter, I think we are all delighted that he has carried his thoughts into words with this Amendment. I do not think the Amendment is yet perfect, but I agree that it goes a long way to being a serious attempt to improve industrial relations in what, after all, will be a new industry when it is reorganised.
The hon. Member for Poplar (Mr. Mikardo) put his finger on the point when he said that there were three degrees of consultation in the Bill. There was, first, to be negotiation of wages and conditions; secondly, the promotion and encouragement of certain things like safety, health and welfare; and, thirdly, discussion of other matters. What the right hon. Gentleman has done by this Amendment is to remove the last category —discussion—and to have only two categories: negotiation of wages and conditions—that is Section 39(1,a) of the 1949 Act—and promotion and encouragement of the other matters such as efficiency, health, welfare and safety. I believe that is a step in the right direction but I cannot see the difference between negotiation, and promotion and encouragement of the other matters.
The function of a trade union is to maximise the interests of its members. This is achieved by many small things, but by three things in particular: to get the best wages and conditions; to get the best working environment and safety arrangements; and to make sure that the business is being carried on in the most efficient, prosperous and rational way so as to maximise the emoluments of its members.
Those three things seem to me to hang together. It is in the interest of the unions to achieve all three things at once. Obviously, no wise union will try to


extract more money at a given moment, in terms of income for its members, than a company can afford, so it would be wise at some stage to have regard to the long-term development and investment for the future. At another stage, it might be better to press for conditions or for a mixture of the three things. For the life of me, I cannot see why it is still necessary to separate the negotiations on pay and conditions from a mutual discussion and debate of the other matters.
As the right hon. Gentleman said, for those who work in the industry, the industry is their whole life. Their whole future is bound up in it. Why are they to take part in discussions on the future of the industry, the manning, the efficiency, the processes and the development of the industry as a whole and then, as it were, withdraw from that piece of negotiating machinery, to stand back, to come again in a different set of clothes and have a pitched battle over wages and conditions?
This traditional separation in the minds of Socialists between the rôle of the trade union regarding the long-term future and development of industry and its day-to-day rôle to hit management as hard as it can for better pay and conditions is, I respectfully suggest, an artificial one. The best interests of the trade union is served if it spurs the management to adopt more modern techniques, more efficient machinery, to suggest ways in which things can be done better, to suggest plant that can do the job of men.
I want to see the trade unions have this opportunity at all levels at national, intermediate and plant level. I do not want these things separated in the way that the Bill, if we accept the Amendment, will do.
Many of these negotiations, if they are to succeed, will have to take place at plant level because it is at plant level that the actual efficiency of the steel industry can be improved. It is only in a works that men and management can know how a better manning schedule can be arranged, what new machinery can be installed, what better techniques exist. So I welcome very much in this Amendment the inclusion of the works level machinery, which, I think it is right to say, is the first time that it has ever been included in a nationalisation Statute.
I turn briefly to the second point, which again I welcome, the onus on the company or the Corporation to make available the information which trade unions will require for discharging their functions. I have always made the reservation that there will be many confidential matters which should not be divulged, for reasons which the Minister quite rightly gave. But beyond those, it is absolutely right that full information should be made available to the trade unions negotiating.
I would carry the argument one stage further. If this information is to be made available to the representatives of the workers, there is always the risk that it will be leaked out, that it will get into the local and perhaps the national Press. So we must release only information which, if it appeared in public form, would not be disastrous.
This leads me to the conclusion that, if any of this information can be suitably released, it can be released to the world at large. I do not see why it should not be published.
2.30 a.m.
If the Amendment is adopted, the representatives of the workers will have more information than we here have received about a nationalised industry either in the Select Committee on Nationalised Industries or in the House itself. We have not had nearly the degree of information which is likely to be yielded here. I see no reason, beyond questions of commercial secrecy, market value of securities, land prices, contracts and the other matters mentioned by the Minister, why this information should not be discussed in public to a far greater extent. It would be a good thing if this were accepted and a far greater part of decisions of this sort were public knowledge. Everything cannot be published, but a great deal more could be published than has been the practice hitherto. If it is to be made available to the trade unions, I very much hope that everything possible will be made available to the public as a whole.
I agree with the Minister that the Amendment represents a major concession to those hon. Members—led, I freely admit, by the hon. Members for Penistone (Mr. Mendelson) and for Poplar (Mr. Mikardo) but supported


from this side—who have said that we should take more seriously in our legislation the need for consultation, for creating a new atmosphere, to help the general tone and also the productivity of the new steel industry. I wish the experiment the greatest success. I believe that it can lead to enormous success. But I emphasise also that the representatives of the workers will have to participate in unpopular decisions as well.
I hope that it will be recognised that, if the Amendment is carried, responsibility will be shared by the trade unions in decisions on such matters as redundancy, closing uneconomic works, perhaps dropping bonuses in lean times, perhaps wholesale closures leading to unemployment. I think that this is the right way for us to proceed in getting accepted in Britain the sort of rationalisation or technical change, call it what one will, which is the purpose of what the Government are trying to do in the Bill and which will have to be done not only in the steel industry but in all the industries of our country.

Mr. Mendelson: According to Mr. Speaker's decision, we are taking one of the following Amendments together with the Minister's Amendment, and I therefore beg to move, as an Amendment to the proposed Amendment—

Mr. Deputy Speaker (Sir Eric Fletcher): Order. Mr. Speaker has not selected the hon. Gentleman's Amendment to the Government Amendment, in line 21, after 'such', to insert:
'records, books, papers and other'.
but has permitted it to be discussed at the same time.

Mr. Mendelson: Then I shall speak to that Amendment, which several of my hon. Friends and I put down as an outcome of our discussion in Committee, but, before I come to the specific details raised, I say straight away that I liked both the tone and the content of what my right hon. Friend said in moving his important Amendment.
Since our debate in Committee, two goods things have happened. First, my right hon. Friend had a meeting with the national executive council of the steel workers' trade union. I quote from the

journal of that trade union, Men and Metal, which said that the Minister
… also entirely agreed that there should be the fullest consultation with representatives of the workpeople before decisions about the future structure of the industry were reached.
That is all to the good, and it will inspire confidence in the areas where the steel works are situated and people earn their living in the steel industry, but it is also of the greatest importance in this transitional stage when these decisions are being shaped.
The second good thing that has happened is that my right hon. Friend has put down his detailed Amendment. He gave an undertaking in Committee. I rather pressed him to give it in the firmest possible terms, and he was patient most of the time under that pressure. His Amendment now implements about 80 per cent. of what we asked for in Committee. It is right, as he said, that it embodies certain important advances in the matter of consultation beyond what has been incorporated in past nationalisation Bills.
In the Amendment with which I am particularly concerned there is reference to records, books and papers, and I want to explain briefly why I and my hon. Friends attach particular importance to their inclusion. The first main reason urged in Committee was that it was about time better and more far-reaching machinery for consultation was established, and that the taking into public ownership of the steel industry represented an excellent opportunity to think again and make some progress.
The second main reason was that there was a general feeling among trade unionists, and quite a sizeable group of managerial personnel in various industries, that it would be a great advantage if there could be improved machinery of consultation.
The third main reason was that in the past there had been a great deal of criticism that the consultative machinery in various industries dealt with things that were not really the most important in the life of an industry. There was criticism and complaint that often the consultative machinery concerned itself with relatively less important matters like the quality of the food in the canteen or the availability of certain facilities.
On the other hand, there was complaint that consultation did not go far enough where there was discussion on some other matters, such as whether the props arrived in time in the mining industry, or whether there was sufficient supply of material of the right kind. Very often the work people on consultative committees had the impression that when they got into the committee room everything was cut and dried, that the decisions had been made in advance and that a wealth of information had been available to the manager and only very limited information had been supplied before the meeting to the representatives of the work poeple, so that they were at a disadvantage from the start.
In our Amendment in Committee and now, we argue that both these defects and criticisms must be met. That is why I attach particular importance to full information being supplied to the representatives of the work people before the consultative meetings are held. If this information is to be supplied, there must be some agreement between the two sides as to what kind of information is needed and required. Both the Amendment I moved in Committee and the Amendment we had hoped to move to Amendment No. 93 agree with the Minister on one important point. If there is to be any real importance in these consultations, the representatives of the workpeople must have a major say as well as the management as to the form in which the information is to be supplied to them.
My right hon. Friend has made a helpful statement. Referring to the information to be supplied, he said that, apart from matters which, for some special reason, must be confidential, he saw no limit to the supply of such information. In Committee I established that the limiting factor was that there must be certain information which it would not be desirable to supply to members of the consultative committee and which some of them would not wish to have anyway. There must be some area, although small, where it was not necessary to provide detailed information.
I urge on my right hon. Friend that it must be agreed between the two sides as to where this area should be, although in the end, in my view, it will be for the management to make the final de-

cision. But the two sides must start from the basis of reasonable equality in deciding the area of information which should be open to the representatives of the workpeople on these committees. This was why we have proposed that the records, books and papers should be reasonably accessible to the representatives of the workpeople in so far as they require such information to fulfill their function on these committees.
In Committee, we introduced the important limiting factor—that it should be information strictly relevant to the job to be done. That being so, why do I attach so much importance to books and records? Because for many years in the trade union movement and industry generally there has been a feeling that this kind of information—how the firm is running and how the order book is going, for example—has been withheld. In some of the most modern firms, a fair amount of this information is already being supplied to representatives of the unions on various occasions. To some of the managers I know this would not appear to be so revolutionary a demand. But practice varies. Many others are very reactionary in this respect.
We are trying to ensure that, when there is consultation on matters of real importance—and this is in the Minister's mind because he deals with the operations of firms and all the essentials which make up the industrial process—then people should feel a sense of responsibility. We believe that those responsible should be in a position of equality as far as access to information is concerned.
One may expect my right hon. Friend to argue that what we are asking for is included in the Amendment, that he has given an assurance that information to the fullest extent, with some exceptions will be supplied. I submit that this does not cover the point because the wording he has chosen would allow the management to produce a digest of information contained in the books and records and supply this to the representatives of the workpeople, and in doing so they would be fulfilling their obligation under the Statute.
We want to remedy that. We want it to be possible for the representatives


of the workpeople to argue under this Bill, "You should supply us access to the books, records and papers themselves." There would still be cases of the overriding power of decision to limit information that would be particularly confidential but if a reference to books, records and papers were included in the Amendment it would give a strong case to the representatives of the workpeople to argue that they should have direct access to them.
2.45 a.m.
If my right hon. Friend were to say in reply to this particular point, "But I assure the House that in fact this will be covered in most cases—it makes no difference", I would say to him that, if it makes no difference, he should include these particular words and it would not make any basic change to the Amendment which my right hon. Friend himself moved.
We have made important progress, and it will be important to make known to trade unionists, workpeople in the steel industry and other industries, that such progress has been made. This is of great importance to people who work in steel, and it is also important to people in many other industries. Since the completion of the Committee stage, the General Secretary of the Amalgamated Engineering Union, Mr. Conway, has published a major article in the A.E.U. journal in which he urges that we should now make real progress in the field of workers' participation in industry. Therefore this debate is of considerable importance.
I would say to the Minister that a matter of confidence is involved here as well. If he accepts our Amendment it would not represent any major change in the direction he is already taking, and there will be a strong feeling, "We have the confidence of the Government in this —the Minister embraces the arguments that have come from the trade unions and the Labour movement on these matters. "This would be a very good start to the new life of the publicly-owned steel industry.

Mr. Mikardo: Little more need be said on this subject, but for those who did battle with the Minister on this subject in the Committee there is a special duty, which is for me genuinely a pleasure as

well, to thank him in the warmest terms for what he has done in putting down this Amendment and for the terms he used in moving it.
When the Bill was first presented to the Committee, the Clause which dealt with this subject was, word for word, a copy of what had been in the 1953 Act, and that is a copy of the standard common form Clause in all the other nationalisation measures. A number of us urged upon the Minister that we ought to have learned something since 1953—no, it is earlier than 1953–1949. We said that we ought to have learned something in the years that had passed and should do something better.
It is general practice for Ministers to take the view that no ideas contain much wisdom or value that do not emanate from their own Departments. It is a great credit to the Minister that he showed enough flexibility—and if I may say so without offence, teachability—to take ideas from the back benches of the Committee, especially in the way in which he has put down this Amendment and carried out quite fairly—not 100 per cent., but very fairly indeed—the undertaking he gave to incorporate the views put to him, and in many parts of his Amendment actually using the words of Amendments which were proposed by others in the Committee. That is a rare thing to happen in the House under Governments of whatever colour, and the Minister is breaking new ground in dealing with the matter in this way.
Having thanked him, I want to endorse what was said by my hon. Friend the Member for Penistone (Mr. Mendelson) about access to records. There is the occasional matter where commercial prudence dictates secrecy, and that is why none of us objects to the final detail of what is to be supplied by way of information to workers' representatives resting with the Corporation or the publicly-owned companies. I would say at once that in my experience this consideration of commercial secrecy in this context happens in practice very seldom indeed, and is often used as an excuse where it does not really exist. The plain fact of the matter is that anything one can safely tell to 30 members of the management of a company, without fear that it will be passed on to its competitors, one can safely tell to half a dozen


shop stewards, because there is more chance of managers being got at, as we all know to our cost, by competing companies than of shop stewards being got at by competing companies.
But, of course, there is a residual area in which one does not even tell members of the management, in cases my right hon. Friend quoted. One would not want to object to that information being in the hands of the Corporation or company, but because that is so I want to put it to my right hon. Friend that it is all the more necessary for him to show that it is intended that this should operate in the spirit as well as in the letter.
My right hon. Friend used one sentence which was very cogent in this connection. I understood him to say—I am sure I did not mishear him—that it was his intention, so far as it concerned him, that there should be no limit on the information provided to workers' representatives, except in these little, narrow cases of commercial secrecy. If I understood him aright, I think that that goes a long way to meet the points which we have been putting to him, but I hope I did understand him aright.
I do not say this out of theory: I am a workers' representative on one of the joint councils of one of the nationalised industries. I am talking about actual practice, 20 years of it in this regard, and I want to ask my right hon. Friend, if he seeks to get the permission of the House to say a word or two more, whether he intends, for example, that workers' representatives shall have the right to see the cost sheets, the forward order book, the forward capital budget, the projected list of plant to be purchased or plant to be renovated; whether they will have the right to be informed in advance both of plans for expansion and for contraction, not only of output as a whole but of particular departments; whether they will be allowed to see the deviation figures on the budgetary control returns which are given to departmental managers. These things are the raw material of management.
Here we are asking workers to participate in management, and if we are asking them to do that we must give them the same tools with which to do the job of management, or they will not be able to do it. In that situation I

should want to see the budgetary control sheet which shows whether I have done better than my budget or whether worse, and why that was, and to use that to decide on changes, and if I am going to discuss proposed changes with my chaps, I should have that, too.
So I repeat to my right hon. Friend; do the chaps have the right to see the cost sheets, the interim draft P. and L. accounts, the forward order book, the capital budget, the revenue budget, the budgetary control returns, the deviation figures on the budgetary control returns? If the answers to these questions are all in the affirmative, then I am sure there is nothing to worry about, and all of us will welcome this Amendment without any reservations whatever. I end as I began, by saying to my right hon. Friend, even if he does not give me affirmative answers to my few questions, "Thank you very much so far." If he does say "Yes" to my questions, a double "Thank you".

Mr. Booth: I join in congratulating my right hon. Friend the Minister on bringing forward the Amendment. It marks a major step forward in appreciation that the success of a major undertaking such as the nationalised steel industry will come about through technical changes which can be implemented by men who have the confidence that their representatives have had a proper say in determining the shape and content of the industry to which they subscribe.
Having said that, however, I wish also to urge the point urged by my hon. Friends concerning access to records and books by workers' representatives. I wish to decry the suggestion that was tentatively made that only such information which could be released to the general public should be released to workers' representatives.
It is important, and it can be seen to be important, that the special position that these representatives must occupy can be demonstrated to them only if they have access to information which could not be made available to the general public. This is part of the process of being concerned in taking the decisions of the industry. More particularly is this true if these representatives are to he expected to participate in taking unpopular decisions.
Having represented my fellow trade unionists on a number of occasions, I assure anyone in the House who has not had that experience that I would not go back to a bunch of my fellow trade unionists and say to them, "We have decided this, but I cannot tell you the reasons, because I have not been told." This must be evident to anybody who has participated in the particularly difficult task of reconciling a number of conflicting requirements of industry concerning the way in which a firm or plant is run or the wages and working conditions of the men in the industry.
It must be appreciated also concerning accessibility to books and records that those who work in the steel industry have a vested interest in the industry which is not a narrow commercial interest. Vested in it is their skill, their training and special knowledge and, to no small extent, their living standards. I am certain that the sort of spirit and the sort of machinery which can be evolved and the sort of results which we want to see achieved by the terms of the Amendment are things that cannot be done overnight.
Having said that, however, I stress that it is of the utmost importance that we go as far as we can in this direction in the shortest possible time. There is a psychological moment with the vesting of the industry for having this change in attitudes towards representation and participation. If we cannot grasp it quickly, if we cannot bring it about within the first few months, there will be much greater difficulty in achieving big advances later. The attitude will set in, "Well, it is pretty much the same anyway." Therefore, it is important that we should establish this quickly.
I suggest to the Minister that access to records and books can do as much as any other single factor in bringing about that new attitude, because this is something which will be truly new in the experience of many workers' representatives in industry. It is wholly appropriate that a publicly-owned industry will, I hope, make this major leap forward and will be run in very real partnership of people deeply concerned. Their success will be success not just for them and their industry, but for the nation.

3.0 a.m.

Mr. Stanley Orme: I want to deal with the central theme of the argument which my hon. Friends and I are putting forward. I was interested to see that in the only contribution to this debate from the opposite side of the House the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) supported the basis of the Minister's Amendment which in effect makes a long overdue frontal attack on managerial functions in this country. It is all right for the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) to laugh. It is these managerial functions which have held back worker participation in industry for half a century.

Mr. Kenneth Lewis: I rose to speak, but the hon. Gentleman was called before I was. I agree that there has been only one speech from this side of the House, but I was slightly amused at the hon. Gentleman starting his speech by talking about the co-operation which he is seeking in industry—something which is greatly desired and supported by both sides of the House—and then using rough words about managements.

Mr. Orme: That is not germane to the argument.

Mr. Ridley: I addressed myself to the desirability of the Amendment, but I did not mention worker control, nor, I think, did the Minister. The suggestion here is that there should be consultation at all levels, and to the fullest depth. Worker control and worker participation are not quite the same thing. That was not part of my argument, so I hope that the hon. Gentleman will not attribute it to me.

Mr. Orme: The hon. Gentleman should not run for cover merely because I take the view that he said something sensible on this issue.
What I am trying to say to my right hon. Friend—and this is germane to the argument—is that those who have played some part in negotiations with managements have come up against this fundamental barrier of managements refusing to concede information, to show the state of the order books, to say whether or not the redundancy they are declaring is fair, to say whether a wage application is fair, and so on. When workers'


representatives ask to see the order books, and to be given other information about the state of the firm, the vast majority of firms refuse to comply with these requests. There are, as my hon. Friend the Member for Penistone (Mr. Mendelson) said, some firms which do not act in that way, but usually there is no real joint consultation or joint participation.
We are asking my right hon. Friend to write this provision into the Bill because it will act as a beacon not only in the steel industry, but in others, and will go a long way to meet the demands of many people in the Labour Party and in the trade union movement who genuinely want to play a part in the management of industry, but who at the moment have no chance of doing so.
Our criticisms apply to the managements of many publicly-owned companies, as well as to those of private companies. This lack of participation is holding back what many of us think could by a dynamic contribution at all levels by workers in these industries. This could be a beacon—

Mr. Arthur Palmer: Would not it be useful if this provision were incorporated in the Statutes affecting all the nationalised industries?

Mr. Orme: It certainly would. My right hon. Friend is carrying a beacon here, and if he gets buffeted about while carrying it he can rest assured of our support in any difficulties that he meets. I have been engaged in this type of negotiation and I know what will happen. The Minister has expressed his understanding of the basic arguments, discussions and rows that will probably take place in the plants.
This will not be achieved overnight by gentle words. It will have to be hammered out. When the ink has had time to dry on the Measure and we can see what is in it things will happen. We need full information and not a digest. I feel that we are on the verge of a real break-through. Many of us have fought for workers' control and participation in industry. Many of us put different interpretations on what that means. But this is a break-through. In the steel industry we can make a fresh start. My right hon. Friend is going very much in that direction, but I ask him to spell out the

situation a little more, as we have sought to do in the Amendment to the proposed Amendment.
We accept that all information cannot be divulged, but the information that is given should be given fully, and should be what the negotiators require. If we can get that principle accepted by the Minister we shall have achieved what we set out to do. I hope that it will provide a basis for joint participation in management, which will lead to further steps in future.

Mr. Kenneth Lewis: I thought that the suggestion by an hon. Member opposite that management can be criticised for what it has or has not done in the past was inappropriate. It seemed to me that the debate was leading us to the position where we were expecting an ecumenical movement in the trade unions in the industry. Then I was worried because I thought there was an ecumenical movement in the Labour Party. There seemed to be so much agreement among hon. Members opposite that I was beginning to get worried. I did not want to see a movement too far in that direction.
We wish the new move success. It is an innovation. I hope that it is fruitful. It will have teething troubles, and the Minister will have to go slowly. If it is successful there is no reason why the principle should not be transferred to other nationalised industries, but I would prefer to see it working in this newly nationalised industry first, before experiments are tried in other nationalised industries.
The important words are
the promotion and encouragement of measures effecting efficiency.
Over the years we have seen the development of negotiations between employers and trade unions in matters of welfare and things of that kind, but this is something new. These measures will include all kinds of things, including many things that the trade unions might not like. They will bring into play the introduction of new technologies which may lead to redundancies, and there will be the question of ending restrictive practices, the existence of which the unions might not like to admit. It will mean bringing into the light of day demarcation disputes which now exist between various unions. That is why it will be necessary to take it slowly.

Mr. Mikardo: It could mean all of those things which the hon. Gentleman says, but would he like me to add one more example? It could also mean that trade unions could come along and say that a factory will not be efficient until it reduces on-costs by removing a lot of redundancy and flummery among management practices.

Mr. Lewis: Yes, except that I should have thought that this was a matter which would be dealt with by the Minister at the beginning rather than at the end. If what he has been saying on Report means anything the Minister will deal with the question of any redundancies among management when he sets up the new boards.
On the subject of books and records, hon. Gentlemen opposite were under some misapprehension as to the powers in the Amendment that the Minister put down, because the Minister cannot say tonight exactly what books and records can be made available. This is a matter for the Corporation. It is right that it should be so. When one is dealing with matters of efficiency in industry it would obviously be necessary, and in the interests of the management, that the maximum amount of information should be made available to those on the trade union side. If management fails to do so, it clearly could not expect, nor could it have, physical co-operation, which would be necessary to gain maximum efficiency which is the objective of this Amendment.

Mr. Norman Atkinson: I wish to raise two important points. The first concerns the speech of my right hon. Friend the Minister, which I consider to be a landmark and an illustration of the tremendous forward thinking that the Labour Party has now developed for its nationalised, publicly-owned industries. This House has spent a good deal of time talking about signposts, whether in the 'sixties or the 'seventies, but tonight the Minister has erected, loud and clear, an important signpost in talking in the terms that he has about worker participation.
Having said that his speech was stimulating, and I predict that most of it will be printed in an issue of that wonderful paper Tribune, and will be a wide debating point in the steel industry, I come

to the point that he made about those things to which workers may not have access in terms of this general information to which he referred. Why we have suggested that it is necessary to include the words "books and records" is because of this important point. I know from my own experience that one of the great problems has always been finding sufficient information about the purchase by management of plant and equipment.
If part of the purpose of having joint participation of this kind is to eliminate some of the problems in the industry, including perhaps restrictive practices, then this can be done only if workers are provided with maximum information about the cause of some of these restrictive practices. By far the greatest cause is the whole question of manning machinery and plant and equipment. The Minister went on to explain that in his interpretation the Bill meant that workers would have full information except where there were commercial interests involved, particularly concerning plant and machinery and general equipment.
I should like him to give some explanation of this and to reconsider those words so that they cannot be used in future for the purpose of denying full information about the kind of plant and equipment and machinery that is to be produced by management and so that workers can take part in discussions and therefore avoid the kind of restrictive practice and disagreement which has led to this misunderstanding throughout the industry in the past.
While recognising the Minister's great contribution this evening, in establishing this signpost and making this sort of progress possible, could he go a little further and reconsider his words about plant and equipment? If this worker participation to which he refers is to have the maximum value this is necessary. He should make another assessment of what he means by full information, and give this assurance to the House.

3.15 a.m.

Mr. Dickens: Because of the lateness of the hour, I will not detain the House for long. I join my hon. Friends in thanking the Minister for the admirable way in which he moved the Amendment. We are tonight discussing the need to improve the quality of consultation and widen the whole sphere of industrial


democracy. That is really what this debate is about.
I wish to raise two matters. The first is the need to widen the amount of information given to the workers' side of the various consultative bodies prior to managerial decisions being arrived at; in other words, the need to ensure that the workers' side of the consultative bodies have all the information they consider they need to enable them to come to a joint decision on the need for future policy making.
That brings me to my second point, which is that we are really asking not just to improve the type and amount of information provided, but for the participation of workpeople in the policy-making decisions of managements. This means, for the steel industry, that should there in the years ahead be a case of a steel works having to be closed, the Corporation should go before the appropriate consultative body not just with a full statement of the facts about the closure, but with an invitation that a joint union-Corporation team should have access to the records, books and other material necessary to enable it to reach an informed judgment on the need for the closure or otherwise.
Only in this way can we carry with us the support of the workers in the steel industry and in industry generally in an age which will throw up an increasing number of problems—of redundancy and many others—created by the more rapid application of science and technology in industry. For the unions this will mean greatly strengthened research departments. They will have to man these joint teams effectively. I believe that we can look forward to a genuine and fruitful partnership in the steel industry. I endorse the sentiments expressed by my hon. Friend the Member for Salford, West (Mr. Orme); that my right hon. Friend has tonight begun to wave the torch of industrial democracy for the steel industry which, under private ownership, has become ramshackle and riddled with nepotism.

Mr. Ridley: Nonsense. Rubbish.

Mr. Dickens: Other nationalised industries will wish to take wider cognisance of these developments and I hope, therefore, that my right hon. Friend will

accept the proposed Amendment to the Amendment, so making it absolutely certain that when this legislation is implemented at the works level, the people concerned will have full access to all the information they need. I close as I began by thanking the Minister for his statement at the beginning of the debate, and I ask him to consider the points we have made.

Mr. Marsh: I have never received so many bouquets from so many unexpected quarters. I have a feeling that I shall never repeat the performance, so I bask in the experience while I may.

Mr. Barber: Only because of the lateness of the hour, I have not added my welcome.

Mr. Marsh: The alliance between the right hon. Member and some of my hon. Friends would be fascinating.
This is an important debate. The number who have made contributions is interesting. I make no great point of it, but it is also interesting that, with a couple of notable exceptions, the interest in this subject has been concentrated on this side of the House. This is a matter with which the Labour movement has been concerned for many years. I have always expressed the view that nationalisation of itself solves nothing. One thing in which I think we have failed in British industry over the years is the extent to which we have persuaded workers to identify themselves with the particular industry with which they are associated. In many companies the workers do not feel that they are a part of the industry. It may be said in all fairness that in many industries—indeed some publicly-owned industries—the extent to which the workers feel that it is their industry is doubtful.
I do not suggest that the Government Amendment will solve all our problems —indeed, it may produce more than it solves—but it opens up a realisation that people in an industry, through their representatives, are entitled to express a view—and their view should carry weight —on the efficiency of their own company. I agree with the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) that this means that workers must face very unpleasant decisions as well as those on the other side. It is my belief


that the workers will accept this. A classic example is the coal mining industry. There workpeople have undertaken and accepted a degree of change at a speed which probably has not been achieved in any other industry and with less industrial disruption than in any other industry. People will face such change provided they know what they are asked to face. One of the great mistakes which all of us in politics make is to underrate the intelligence of a highly sophisticated electorate.
I wish to underline two things. The Amendment says that the consultation shall be for
the promotion and encouragement of measures affecting efficiency, in any respect,".
As my hon. Friend the Member for Lewisham, West (Mr. Dickens) said, it is important that the representatives of the workers should have the information necessary before going into the room for discussion. We have all had the experience of being given information which the chap on the other side has had for a week.
The Government Amendment clearly says:
the Corporation or… the publicly-owned company shall make available to those persons, at a reasonable time before the discussion is to take place, such information in their possession relating to the subject …
There must be managerial responsibility all the way through. The management must take the responsibility for this. But, even then, it shall be
after consultation with those persons".
So the decision not to provide information must be a decision taken after consultation with the persons concerned.
This leads us into an interesting field. I would rather wait a week or two before extending it to the whole scope of nationalised industry, because it will be interesting to see how it works out. My hon. Friend the Member for Lewisham, West (Mr. Dickens) said that this means that the unions also, if they are to be involved in this, must look hard at the machinery, the equipment, the tools they possess for taking part in such decision-making. I am not sure that it will do the trade union movement any harm to have to look at some of its support de-

partments and work out whether they are adequate for the job they will be doing.
I intend that the Corporation shall follow the spirit of the Amendment as well as the letter of it. Normally, the information would take the form of records, books or papers, as well as other forms. There are some books and some papers which, by their very nature, would be excluded, regardless of the issue. To give one typical example, I would think that the minutes of the Corporation would not normally be available, whatever the issue. Notes of some of the Corporation's fall-back positions in a negotiation would be things which it would not want to put up.
I have only one quarrel with the Amendment to my proposed Amendment. I do not know that it is a massive point. It is possibly a footling point. Precisely because my Amendment refers to necessary information, the Amendment to my proposed Amendment, by specifying
records, books, papers and other
information might carry the implication that some confidential books and records, such as minutes of the Corporation, might be expected to be made available. I do not make a great point of that.
My main point is that, given that we will be dealing here with sizable and experienced trade unions which—and I know most of the personnel involved—will recognise what their statutory rights are and will not be backward in taking advantage of them, they will be able to get the information they require. I repeat that, used to the full, we could get the right balance. I do not believe in a system whereby we try to run industries by workers' councils. I believe that management has to take these decisions. I believe that we can produce a genuine partnership where the decisions about the efficiency of the industry and where decisions which are regarded in some cases as the managerial prerogative, to use a favouriate phrase frequently used to trade unions, can be challenged.

An Hon. Member: The managerial function.

Mr. Marsh: Clearly, the management must have the right to hire and fire. It must have the right to decide what decisions it will take. It is right that those


whose destinies are involved in those decisions should have the right to express their points of view and to press them with the knowledge available.
It has been said several times that this is an experiment. Used to the full, it could be a very important one. If it is a failure, we will all share in the failure. Far more than any feelings of failure any of us will have, it will be a very sad and unhappy thing for the labour movement generally if it fails. If it is a success, it can only produce good—for management relationships, for the efficiency of the industry, and for the wellbeing of those employed in it.
For all those reasons, I hope that hon. Members on both sides will feel able to support the Amendment.

Amendment agreed to.

Mr. Marsh: I beg to move,
That further consideration of the Bill, as amended, be now adjourned.
I do so in order that I may savour to the full some of the things that have been said in the course of the debate tonight.

Question put and agreed to.

Bill, as amended, to be further considered this day.

PUBLIC ACCOUNTS

Mr. Ernest Armstrong discharged from the Commitee of Public Accounts, and Mr. Frank Hooley added.—[Mr. Charles R. Morris.]

PLAYING FIELDS AND RECREATIONAL FACILITIES

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Charles R. Morris.]

3.31 a.m.

Rear-Admiral Morgan Giles: After the whirlpools and crosscurrents of the Steel Bill, it is nice to cruise into more tranquil waters on a subject where there is very little party controversy at all. The principal legislation affecting land for playing fields and recreation grounds has been enacted on more or less similar lines and passed by both Labour and Conservative Governments. My argument concerns mostly the way in which existing legislation should be administered.
I want to do three things—to summarise the case for additional recreation land and open spaces being provided; secondly, to remark briefly on progress to date on this subject; and finally, to seek certain assurances from the Minister about the way in which the Government intend to deal with this matter.
As regards the need for this land, his Royal Highness the Duke of Edinburgh, speaking as President of the National Playing Fields Association, said:
Recreational facilities are needed for the very young to the very old, for beginners and for experts, for teams and for individuals, for indoor and outdoor recreation—and even for spectators.
He went on to say:
I think that ratepayers will begin to look to the local authorities to provide these facilities in the same way that they look to them to provide water, sewerage and street lighting.
Certainly this is one of the many problems which beset local authorities in these days of rapidly increasing population, when more and more people are acquiring greater leisure and also the means to enjoy it.
Over the last dozen years or so there has been a dramatic evolution in our material progress. I believe that it is desperately important that adequate facilities are evolved pari passu with housing if the character of our people and their health of mind, body and spirit are to be maintained. In this I put health of mind first. I feel that the cumulative stress and strain of modern life, particularly in our great cities, and the pace at which we live and drive, may give rise to a sort of mass neurosis which could be the scourge of the 20th Century just as the Black Death was some 300 years ago.
We must invest in sufficient recreational facilities to keep ourselves sane as well as healthy. I am sure that the Joint Parliamentary Secretary to the Ministry of Housing and Local Government will agree that even at today's prices it is cheaper to buy a sports ground than it is to build a mental hospital.
As regards progress with these problems, to date every Member of Parliament must know of the many problems of land usage in his constituency and it is a fair bet that some of the most intractable of these concern the use of


land for sport and recreation. In my constituency, Winchester, the residents' association of the new Harestock Estate has no children's playground, and development of the site there has gone so far that it is now almost impossible to see how this basic amenity can be adequately provided. Equally, as another example, the Winchester Rugby Football Club has been looking for a suitable ground for about eight years, so far without success. In my own village, the New Alresford Golf Club is threatened by a proposed by-pass which would cut out three of its nine holes, and it is difficult to see a solution.
These are typical of the difficulties in an area where the population density is not at all high. It must be very much worse elsewhere. I recently read, for instance, that if all the population of Lancashire were to go to the seaside on the same fine day, there would be exactly two inches of coastline available to each person.
The outlook is not entirely bleak, and I should like to pay tribute to the work which has been done by very many voluntary bodies. Perhaps first and foremost of these is the National Playing Fields Association, which has been campaigning vigorously and very effectively for over 40 years. The Royal Yachting Association has publicised the ever-growing demand for recreational facilities, sailing, boating, and so on. The Solent Preservation Society has been active to preserve the only large stretch of sheltered water on the whole of the South Coast of England. The National Trust, and its offshoot "Operation Neptune", are both very well known, and there are countless others.
Also, to be fair, one must say that the majority of local authorities are sympathetic within their financial limitations. Certainly the Hampshire County Council has been most helpful, enterprising and progressive in this, as in many other matters. Sir Andrew Wheatley, the Clerk to the County Council and the Hampshire Planning Authority realise that, in Sir Andrew's words:
we are dealing with a human problem of the first magnitude. What concerns us is the provision of the best possible environment in which people can live, work and play.

Regarding the steps that should be taken for the future, the first that I want to urge upon the Government is that they must think big about this problem. My chief worry is what is the Government's thinking on this matter? They must think big. I am sure that the Minister, in his reply, will be speaking about the new Sports Council. I am equally sure that this is an admirable body and that its function to advise the Government is a correct one. I hope that the Minister will not think me cynical if I say that there has never been any lack of advice for the Government on what to do, and no further proliferation of councils, committees or sub-committees will really advance the matter much further. I am not, of course, saying anything against the Sports Council, either collectively or individually, but the point is that the problems are well known and evident for all to see.
What the Government have to do, in short, is to make sure that, by hook or by crook, land is available. Land, after all, is the stock in trade of recreation, just as it is for housing. The two must essentially go together.
Incidentally, I note that Clause 1 of the new Land Commission Bill instructs the Commission
to comply with such directions, whether of a general or a specific character, as may be given to them by the appropriate Minister or Ministers.
In other words, it authorises them to do anything at all anywhere. Of course, the Minister must expect me to express a fervent hope that the Land Commission Bill will not be passed in any shape or form. But, certainly as regards recreational land, no such extravagant powers as are included in the Bill are needed as the Minister has ample powers under previous legislation. He only needs to use them.
The Land Commission Bill in this context is a sledgehammer to crack an already open walnut. It must also be remembered that some 30,000 acres of valuable agricultural land disappears for building purposes every years; so a silk glove is needed here, not a mailed fist.
My first specific question is to ask the Parliamentary Secretary to tell us exactly how the Government intend to ensure that land for recreation and land for


housing are made available simultaneously. I see from the Report of the Sports Council that public capital investment in sport and recreation for the year 1965–66 totalled just over £34 million. In the break-down, the facilities used exclusively for sport account for £13·9 million. The figures in the Report seem to indicate, at first blush, rather too much emphasis on grandiose schemes such as very large swimming pools. For instance, the Report tells us that the greatest expenditure in England and Wales, making up over 80 per cent. of loan sanctions, was for the construction of new swimming pools, and 39 schemes received consent. As a matter of arithmetic, this means that £250,000 or more went on each swimming pool project.
At first sight, it would seem more sensible to buy land for playing fields in built-up areas and land for wider recreational purposes in the countryside before the march of development inevitably puts up the price, installing such facilities as swimming pools or whatever it might be at a later date when they can be afforded. This brings me to my second question. Will the Minister say something specific about the Government's policy in this connection?
Third, what are the Minister's views about how much land should be allowed for playing fields in urban development? The National Playing Fields Association has for many years advocated a figure of 6 acres per 1,000 inhabitants. This is an optimum figure, and one must bear in mind that it represents about a quarter of all development land being left as open space, a very large figure. It may no longer be correct as a figure. It may not be attainable in present conditions of land shortage. Perhaps it could be scaled down now that so many families have motor cars and can go further afield from their homes.
But the National Playing Fields Association has been the only body brave enough to stick its neck out and give a definite figure. I want the Government either to accept it for planning purposes or reject it. If they accept it, the local authorities should be urged and assisted to comply with it. I say urged and assisted, not compelled to comply. If the Government do not accept it, will the hon. Gentleman tell us what their policy is on the question? It is essen-

tial that the local authorities have before them a guidance figure of that sort.
Fourth, I urge the Minister to make full use of the knowledge, experience and enthusiasm of voluntary and amateur clubs and associations. There are many thousands of these throughout the country, and they provide the life-blood of British sport and recreation. It should be a fundamental principle of Government policy to provide the climate in which sport and recreation can flourish but they should not seek to organise it directly. There is a parallel here with industry and private enterprise, but I shall not ripple the smooth surface of this debate by throwing that pebble in at this hour of the morning.
Fifth, I put in a special word for sailing and just "messing about in boats". In 1946, only 20 years ago, the Royal Yachting Association recognised 321 clubs in England as compared with 1,370 today. Its individual membership has risen in the same period from just 273 individuals to over 23,000. The Association does yeoman service on behalf of boat owners. When the Government bring forward their countryside Bill, which was forecast recently by the Minister of Housing and Local Government, I hope that coastal and inland waters for recreation will loom large in the plans proposed in it.
But will the Parliamentary Secretary assure us that it will include no regulation or registration of boats? A recent article in the Daily Telegraph made this point very strongly, and I wish to quote a short paragraph:
When you step into a boat, you step out of bondage. You can shove off without obtaining prior official permission, without paying special taxes or licence fees, without having a medical certificate or a blood check, without passing a proficiency test, without a passport or an insurance card, without putting money in a meter, without giving the police your name, age, occupation …
Can the Minister promise the huge population which is interested in boating in all its facets that the Government intend no such regulatory measures in the future. Can he give a firm assurance on that tonight?
To sum up: Mr. Smart, the Hampshire County Planning Officer, visualises a recreational triangle. The first side concerns actual sporting interests; the second, what he calls "the unorganized


use of the countryside and coast by an ever-growing and car-owning population"; and the third, town and country planning in all its aspects.
I cannot conclude more tactfully than by asking the Minister to remember a statement in one of his party's General Election manifestos that it is not the job of the Government to tell people how leisure should be used. When I read that, I said to myself, "Thank goodness for small mercies". It continued by saying that in a society where facilities are not provided when they are not profitable … it is the job of the Government to ensure that leisure services are provided. Will the Minister please see that that is one of the promises in the Manifesto that are kept?

3.48 a.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): The whole House would agree with the hon. and gallant Member for Winchester (Rear-Admiral Morgan Giles) about the great importance of playing fields and recreational facilities. I do not think that there is any argument about that. But the question must be looked at in the context of the financial situation.
There is the irony that people in general terms are always in favour of reducing public expenditure and demand a much more vigorous attitude from the Government in cutting public expenditure, as long as it does not happen to cut into their own particular interest. The Government must examine all claims on the public purse, phase the development in each sphere and apportion the amount that is available. That is done by my right hon. Friend the Minister of Housing and Local Government by means of loan sanctions. That is his main control over the amount of money that can be spent in this sphere. There is a limit to the amount that can be spent on the provision of playing fields, as there is to every other type of capital investment in local government.
The hon. and gallant Member asked how land for recreation and housing can be provided simultaneously. It is the primary responsibility of the planning authority to see that when it gives planning approvals to development for

housing or any other purpose there are adequate resources of land for recreational purposes. The hon. and gallant Member quoted the case of Harestock. As far as I know, we in the Ministry have not had any part in Harestock. The planning authority has given planning permission and has presumably made its own allocations of land for recreation there. If it has not, then the hon. and gallant Gentleman should take it up with it and the local authority in his constituency rather than with the Ministry. People are always complaining about Government interference with the work of good local government and it is an essential function of good local government to provide proper and balanced schemes.
The hon. and gallant Gentleman referred to the need to be fairly critical of some of the proposals made—proposals which, for example, are too grandiose, perhaps for swimming baths and so on. That is where the Minister plays a part through loan sanction. One of the things we look at in giving loan sanction for such purposes is whether the project is reasonable and whether it is too ambitious. In order to spread the money available it is necessary that we be fairly strict about this.
The hon. and gallant Gentleman asked about the standard of the six acres per thousand. This is a N.P.F.A. standard, not the Ministry's, but it is the only one available. I think that an average of that sort is not really very helpful because one cannot compare, with such a yardstick, very widely differing areas and widely differing needs. A working party of the Sports Council is looking at the question of the standard and I hope that it will report the results of its thinking in the spring. Until then, the Minister has, in examining applications for approvals for open spaces, to look at the particular conditions in the neighbourhood concerned and consider what alternative facilities are available and so on.
I cannot give any assurance about what will be in future legislation on the countryside. To do so would be to break the rule about anticipation of legislation. The hon. and gallant Gentleman will have to wait for the Bill, when he will be able to develop any criticisms that he may have.
The only other point to which I draw the hon. and gallant Gentleman's attention—he did not mention it through a surprising lapse—is that the Government have introduced a grant for the acquisition of public open spaces in the Local Government Act which has just passed through Parliament. There is thus now a specific grant to assist local authorities which are acquiring public open spaces That is of practical help.
This does not mean that there can be unlimited acquisition. It has to be

looked at against the background of how much money is available and of competing needs. But the fact that we chose this time to introduce a new grant of 50 per cent. shows that we are conscious of the importance of public open spaces and that we want to do all we can to encourage this development and help with such acquisition.

Question put and agreed to.

Adjourned accordingly at six minutes to Four o'clock a.m.